The last two decades saw geographical indications (GIs) often being put into the center-stage in many multilateral and bilateral trade talks. There have been demands by the European Union (EU) and many developing countries to grant higher protection for products other than wines and spirits at the
Protection of GIs refers to protection of products originating from a certain geographical area1. Thus, protection is provided against the use of GIs for products not originating from the geographical area to which the indication refers. Such protection has far reaching implications for both producers and consumers alike. It helps consumers distinguishing goods produced in a particular geographical region from goods produced elsewhere thereby preventing the former from being misled. So the idea is to provide protection for GIs, a kind of intellectual property right, which entitles the enterprises that are located in the designated area to exclude others from using the indication.
The important issue about these products is the link between their quality characteristics and the geographical attributes of the region where these products are being produced. Such products are mostly agricultural commodities like wine, cheese, rice, fruits, and coffee but also refer to handicraft items such as silk clothes with traditional paintings on them; or it could be even herbal medicines such as Neem and Turmeric
Branding strategies centering on the geographical origins of a product can provide a basis for differentiating commodity products. The use of such “geographical indications” (or GIs) can involve unique quality characteristics associated with a particular location or quality images that are based on the history, tradition, and folklore in a region.
Creating an imagery of exoticness:
A 2004 article in Business Week describes different salt products with these characteristics: shimmering Indian Black Salt, Portuguese Algarve Salt, Australian Murray River Pink Flake Salt, Il Buco Handcrafter Italian Wooden Sea Salt, French Fleur De Sel, and Clay-tinged red Alaea Hawaiian sea salt. “Unlike common table salt, which is mined from the land and then refined, the best specialty salts are harvested from seawater that’s allowed to evaporate in the sun. The process preserves the minerals that lend each salt its distinctive appearance and flavor” .According to the article, as a consequence of the success of GI strategies for these salt products, Basmati rice are the front runners gourmet cooks pay as much as $80 a the existing Indian GIs, Darjeeling tea and and Basmati rice are the front runners in terms of international market and exportability.
Strategies based on GIs could also represent a viable approach for producers to gain competitive advantages in the marketplace. GIs allow producers to create an image of “exoticness” or scarcity that enables them to obtain premium prices for products that would otherwise be ascribed commodity status.
Telling a legendry brand story with high recall value Products with long tradition and history often blend the benefits of the location and authenticity of production expertise (or process secrets) with legends to create an additional dimension of folklore to create mystique. According to Kraft Foods, the legend associated with Parma cheese is that near the town of Parma, Italy, there was a mountain made entirely of grated parmesan cheese. Atop the mountain, a community of macaroni makers prepared hot pasta, bathed it in butter, and rolled it down the mountain to the hungry people waiting below (Kraft Foods, Inc. n.d.). Although this delicious story is just a legend, it does create a mystical aura that helps consumers remember the brand.
Creating Brand Loyalty
This strategy of building an image of quality for a class of products made in a certain area helps products from a country or region achieve consumer acceptance quickly and to also command premium pricing. The same idea has helped many food/beverage and other commoditized products such as cheeses, Swisschocolates, Russian German beers, French and Italian wines and cheeses, Swiss chocolates, Russian vodka, Chinese tea and silk, and Holland bulbs. Consumers buy various brands of these products as long as those brands originate in a country/region known for producing those products. Such geographical identifiers have not been treated as a brand but as an additional cue for consumers to judge products.
IP asset is shared by group of companies
First, geographical identifiers are not owned by a single producer but rather by a collective of companies operating in a particular geographical area. Hence, individual producers have to identify their corporate/ brand name as well as the geographical identifier. While GIs help differentiate products originating in one geographical area from those produced elsewhere, they simultaneously reduce the distinction between companies producing competing products in the same geographical area.
Competitors may take advantage of established brand equity
Second, the original developers of a GI identity cannot reserve all of the benefits associated with a GI (which they helped create) for them. Once a GI “brand” is successful, new entrants will enter the geographical area to take advantage of the brand equity residing in the GI. It has been highlighted on many occasions that the legitimate right holders of Darjeeling tea have long been adversely affected by the free-riding of many commercial entities, who have been misusing the reputation associated with this premium quality Indian tea .For instance, authentic Darjeeling tea produced in India is about 10 million kg; however, according to a rough estimation, around 40 million kg of tea is being sold worldwide as Darjeeling tea every year (Tea Board of India 2006). Other varieties of tea from countries like Kenya, Sri Lanka or even Nepal have often been passed off around the world as Darjeeling tea.
Dilution of brand
Dilution can also arise through trademark tarnishment, which involves a reduction in the favorability of a brand’s associations and image. In essence, the actions of one mark serve to mar or tarnish the positive associations or equity created with respect to the senior mark.
A case in point is “Basmati” rice from India, which has been copied as “Texmati” rice from Texas and “Calmati” rice from California (the latter products are also referred to as “American Basmati“). Many popular food varieties can be produced at different locations than their traditional home locations.
Weak IP System
The main reason for the delay in getting Basmati rice registered as a GI is related to the selection of right varieties. Over the years, scientists have developed several varieties naming them as Basmati. This has led to the problem that many of these aromatic rice varieties do not contain any parental line of the traditional Basmati. This has created enormous confusion regarding the authenticity of different varieties of Basmati (see Sharma 2005). For example, scientists in India have developed varieties of Basmati rice having parental lines of traditional varieties like Pusa Basmati-1, Haryana Basmati, Kasturi and Mahi Sugandha. Other aromatic rice varieties were developed which do not contain immediate parental lines of traditional varieties like Pusa Basmati 2 and 3, Pusa RH-10, Pusa-1121, Vasumati, Pusa Dhan-15, Haryana Mahak, and CSR-30.