- Slides: 40
Geographical Indications: Connecting Products with Geographical Origin for Value Creation. Flavio Innocenzi
TOPICS: 1. DEFINITIONS & FRAMEWORK. 2. A SWOT PERSPECTIVE. 3. GENERATING A PRICE PREMIUM AND EXPORT OPPORTUNITIES.
1. DEFINITIONS & FRAMEWORK.
GEOGRAPHICAL INDICATIONS (definition). “indications which identify a good as originating in the territory of a member, on a region or locality in that territory, where a given quality, reputation or other characteristics of the good is essentially attributable to its geographical origin. ” (art. 22(1)WTO TRIPs Agreement)
EUROPEAN (REGULATORY) FRAMEWORK. REGULATION (EU) No 1151/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on quality schemes for agricultural products and foodstuffs § Wines (Regulation (EC) No 1234/2007) § Spirits (Regulation (EC) No 110/2008) § Aromatized wines (Regulation (EEC) No 1601/1991) § Non Agricultural products: not yet harmonized at EU level
EUROPEAN (REGULATORY) FRAMEWORK. Regulation (EU) No 1151/2012: protection of GIs is a means of protecting the EU's 'living cultural and gastronomic heritage'. Article 3(5) of the Treaty of European Union: shall respect its rich cultural and linguistic diversity, and shall ensure that Europe's cultural heritage is safeguarded and enhanced. Article 167 of the Treaty on the Functioning of EU: the Union shall take cultural aspects into account in its action, in particular in order to respect and to promote the diversity of its cultures.
EUROPEAN REGULATORY FRAMEWORK. REGULATION (EU) No 1151/2012 Art. 45: ROLE OF GROUPS. . . a group is entitled to: a) guarantee quality, reputation and authenticity of their products on the market, by monitoring the use of the name in trade and, if necessary, by informing competent authorities b) ensure adequate legal protection c) develop information and promotion d) ensure compliance with product specification e) improve performance of the scheme f) enhance the value of products
EUROPEAN REGULATORY FRAMEWORK. REGULATION (EU) No 1151/2012 Art. 13: PROTECTION (FROM FRAUDULENT AND MISLEADING PRACTICES). Registered names shall be protected against a) any direct or indirect commercial use (in respect of products not covered by the registration) a) any misuse, imitation or evocation b) false or misleading indications as to the provenance, origin, nature or essential qualities of the product c) any other practice liable to mislead the consumer as to the true origin of the product.
ENFORCEMENT: legislative foundations/basis. National Law Administrative Fines (Legislative Decree 297/2004) EU Law: Reg. (EU) 1151/2012 Art. 13(1) Criminal Law Art. 515, art. 515(2) and art. 517(4) EU Customs Regulations + Reg. 1151/2012 Art. 13(3)
MARKET DIMENSION Italian agro-food GIs. Fact & Figures. 2004 2015 Increase Certified production (tons) 741. 466 1. 470. 000 98% Turnover (million €, EKW) 4. 578, 70 6. 380, 00 39% Consumer sales (million €) 6. 420, 20 13. 200, 00 106% Export turnover (million €) 849 2. 800, 00 230% 141. 654 585. 100 313% Export volumes (tons) Source: Ismea
MARKET DIMENSION Italian agro-food GIs. Market share. 38% 8% 16% 12 14% Source: Italian Ministry of Agriculture
2. A SWOT PERSPECTIVE.
Strengths: Strengths Weaknesses: - rural development - cultural heritage - competitive advantage depend on cohesion and shared values (role of groups) Opportunities: Threats: Threats - from protection - from controls - for price premium - for export increase - misleading practices & frauds - parasitic practices (common food sold as GI)
STRENGTHS: according to EU legal framework. REGULATION (EU) No 1151/2012 The quality and diversity of the Union’s agricultural, fisheries and aquaculture production is one of its important strengths, giving a competitive advantage to the Union’s producers and making a major contribution to its living cultural and gastronomic heritage.
STRENGHTS. “Geographical indications' (GIs) for agri-food products are a major asset of the European model of agriculture, acting not only as a tool for protecting consumers interests and reinforcing confidence in high -quality and typical products, but also as a legal and commercial basis for the development of rural areas, the preservation of cultural heritage as well as the promotion of SMEs. ” The SINER-GI PROJECT
THREATS. NAMES MATTER! CAR PENCIL HOUSE
THREATS. practices liable to mislead the consumer as to the true origin of the product i. e. : HOW TO MISLEAD CONSUMERS THROUGH THE ‘JUNGLE MARKET EFFECT’.
THREATS. False or misleading indications as to the provenance, origin, nature or essential qualities of the product. Feta: Greek cheese from goat’s milk.
THREATS. False or misleading indications as to the provenance, origin, nature or essential qualities of the product. (real) Asiago: Italian PDO Cheese, characterized by marked and irregular holes:
THREATS. Misuse, imitation, evocation… Prosecco: Italian sparkling PDO wine, produced since the XVI century.
THREATS. • Economic Study Shows 60 Billions of Euros in Losses to Italian Food Industry Under Abusive Exploitation of EU Geographical Indications. WHAT’S AT STAKE (all over the world): parasitic exploitation practices of GIs and their reputation are jeopardizing the economic and social survival of rural communities all over the world. The cultural heritage of those communities is under serious threat. Exploiting the equity and the awareness of GIs for increasing sales of generic food is an unfair practice, misleading millions of consumers every day.
NEW OPPORTUNITIES FROM PROTECTION.
NEW OPPORTUNITIES FROM PROTECTION.
OPPORTUNITIES FROM CONTROLS: ADDED VALUE FOR CONSUMERS. E. g. : Yearly controls/inspections along the food chain Italy (agro-foods) - meat products 60. 441 42. 172 - cheeses 9. 171 - fruit and vegetables 3. 969 - other products 2. 951 - fresh meat 2. 178 Source: AICIG; year 2013
OPPORTUNITIES FROM CONTROLS: ADDED VALUE FOR CONSUMERS. Number of laboratory analysis: 75. 887 - meat products 33. 787 - cheeses 7. 237 - fruits and vegetables 3. 485 - other products 30. 980 - fresh meat 1. 377 Source: AICIG.
NEW OPPORTUNITIES FROM PROTECTION. Parmesan Feta
3. GENERATING A PRICE PREMIUM AND EXPORT OPPORTUNITIES.
GENERATING A PRICE PREMIUM THROUGH GIs. Collective approach « Sui generis » protection Value added for local producers and communities Sustainability Promotion
OPPORTUNITIES FOR A PRICE PREMIUM. «Genius Loci» unique values USP: Unique Selling Proposition
GIs as OPPORTUNITIES FOR A PRICE PREMIUM. TRADE ADV MARKETING WORKSHOPS PRESS & PR MOBILE EXHIBITIONS SOCIAL
GIs AS OPPORTUNITIES FOR A PRICE PREMIUM. Average price of Asiago PDO against generic cheeses.
GIs AS OPPORTUNITIES FOR EXPORT. Case history 1. 1) MARKET SEGMENTATION 2) LEVERAGED INVESTMENTS 2009/2016: FOCUS on +63% +80% CO-PROMOTION PUBLIC (volume)with member (turnover) KEY MARKETS FUNDS companies
GIs AS OPPORTUNITIES FOR EXPORT. Case history 2. 2009/2016: +63% (volume) 2009/2016: +80% (turnover) Export performance of the Prosecco DOC wine
GIs AS OPPORTUNITIES FOR EXPORT. Case history 3. 2009/2016: +63% (volume) 2009/2016: +80% (turnover) Export performance of the Prosecco DOCG wine
GIs AS OPPORTUNITIES FOR EXPORT. Case history 4. 2009/2016: Melinda PDO apple: +63% ØProduction: 200, 037 tons (volume) Ø Members: 4, 000 ØRevenues: 250 M € ØExport: 55 M € 2009/2016: +80% (turnover)
GIs AS OPPORTUNITIES FOR EXPORT. Case history 4. Melinda PDO apple: all the farmers in the production area are associated. Ø average surface: 1, 6 hectares Ø average production: 62 tons/hectare Ø storage centers: 17 Ø packaging units: 7 Ø employees: 1, 300 2009/2016: +63% (volume) Consortium 16 cooperatives 2009/2016: 4, 000 farmers +80% (turnover)
GIs AS OPPORTUNITIES FOR EXPORT. Case history 4. 2011: 12% exported 2014 -2016: 25% exported (yearly average) Export performance of Melinda PDO apple.
. . . THAT’S WHY GEOGRAPHICAL INDICATIONS ARE. . . a great opportunity (even for those who are against GIs)