Understanding the Real-World Impact of Geographical Indications: A Critical Review of the Empirical Economic Literature

Abstract

In our study, we tried to collect empirical studies focusing on the economic impact of Geographical Indications (GIs). Using a systematic literature review approach, we investigated three different aspects: market size, price premium and impacts on rural development. Based on the findings of studies both from the grey and academic literature, the results are quite mixed. Though the number of GI-related empirical studies has risen in recent years, there is a lack of economic data to support policies related to GIs, even in the European Union (EU), where the most important GI system exists. Overall, it is impossible to draw any general conclusions about the economic impact of GIs. Some countries have remarkable GI market size, and some GI products have a determinative role in both domestic and export markets; however, it is not general. Again, some particular GI products of some regions could gain significant price premiums, but due to the associated higher production costs and unequal distribution in the value chain, it might not result in higher producer incomes. The most conflicting empirical results were found in how GIs can contribute to regional prosperity, as evidences of the harmful effects of GIs on rural development were also identified.

Full text

sustainability
Review
Understanding the Real-World Impact of
Geographical Indications: A Critical Review of the
Empirical Economic Literature
Áron Török 1, * , Lili Jantyik 1, Zalán Márk Maró1and Hazel V. J. Moir 2
1
Department of Agribusiness, Institute for the Development of Enterprises, Corvinus University of Budapest,
1093 Budapest, Hungary; lili.jantyik@uni-corvinus.hu (L.J.); zalan.maro@uni-corvinus.hu (Z.M.M.)
2Centre for European Studies, Research School of Social Sciences, Australian National University,
Canberra 2600, Australia; hazel.moir@anu.edu.au
*Correspondence: aron.torok@uni-corvinus.hu; Tel.: +36-1-482-5397
Received: 7 October 2020; Accepted: 8 November 2020; Published: 12 November 2020


Abstract:
In our study, we tried to collect empirical studies focusing on the economic impact of
Geographical Indications (GIs). Using a systematic literature review approach, we investigated three
different aspects: market size, price premium and impacts on rural development. Based on the
findings of studies both from the grey and academic literature, the results are quite mixed. Though
the number of GI-related empirical studies has risen in recent years, there is a lack of economic data
to support policies related to GIs, even in the European Union (EU), where the most important GI
system exists. Overall, it is impossible to draw any general conclusions about the economic impact of
GIs. Some countries have remarkable GI market size, and some GI products have a determinative role
in both domestic and export markets; however, it is not general. Again, some particular GI products
of some regions could gain significant price premiums, but due to the associated higher production
costs and unequal distribution in the value chain, it might not result in higher producer incomes.
The most conflicting empirical results were found in how GIs can contribute to regional prosperity,
as evidences of the harmful effects of GIs on rural development were also identified.
Keywords: geographical indications; PDO; PGI; market size; price premium; rural development
1. Introduction
Geographical Indications (GIs) were introduced into international trade treaties by the European
Union (EU) during the Uruguay Round trade negotiations. Although strongly resisted by the USA
and other New World countries, the 1994 Trade-Related Aspects of Intellectual Property Rights (TRIPS)
Agreement, under the World Trade Organization (WTO) Agreement, created an effective compromise.
Since then the EU has been a strong advocate for increasingly strong GI regulation and consultations
are currently under way to further strengthen EU GI regulations.
Within the EU, the GI program is managed by the Directorate-General, Agriculture and Regional
Development. In this paper, the focus is on how GIs perform as an instrument of agricultural and
regional policy, reflecting the EU arrangements. Our particular focus in this study is on the size of the
market for GI products, the extent to which they contribute to increased net producer income and the
extent to which they contribute to regional development. There are, of course, many other important
questions about how GIs operate, for example what price premiums consumers are willing to pay,
but these are beyond the scope of this particular study (several comprehensive reviews on GI related
WTP exist, however with conflicting results. Even in the European Union, the recognition of GI labels
is low and other quality attributes of food products (brand in particular) might have a greater influence
on purchasing decision, therefore the role of GIs on WTP for quality food product is not clear).
Sustainability 2020,12, 9434; doi:10.3390/su12229434 www.mdpi.com/journal/sustainability

Sustainability 2020,12, 9434 2 of 24
By 2009 GI systems were used already in 167 countries and regions. Recently China has become
the country with the largest number of registered GIs, but for many years the majority of registered
GIs were found in the EU [
1
]. In general, in bilateral trade agreements between the EU and other
countries, the number of GIs in the EU (and listed for inclusion in trade treaties) far exceeds the number
in partner countries.
The EU-wide system for GIs was first introduced in 1992 [
2
] and has been revised twice since then
(in 2006 [
3
] and 2012 [
4
]). The EU system has two major types of GI. Protected Designations of Origin
(PDOs) are very similar to the French Appellation d’Origine Contr
ô
l
é
e (AOC) system, already existing
before the EU GI system [
5
,
6
]. Protected Geographical Indications (PGIs) have a German origin with
a strong reputational element but a much lower link to the place of origin [
7
]. Just five EU Member
States (Italy, France, Spain, Portugal and Greece) are the primary users of the EU’s GI system, both in
terms of the number of registered products and in economic importance.
Recent trade agreements clearly indicate the political importance for the EU places on GI policy.
In current negotiations with both Australia and New Zealand, the EU has again indicated that GIs
are an essential element in any trade agreement. This may be surprising considering their limited
economic importance in both domestic production and international trade. According to the results of
research published in 2019 [
8
], on average, the share of GI products in the national food and drink
industry in 2017 was around 7% in the EU Member States. Further, 58% of EU GI production is sold in
domestic markets, and only 22% of EU GI products is sold outside of Europe. Of GI exports, 90% are
wines or spirits. The primary beneficiaries of GI labelled exports are France and Italy. But largely due
to very limited available data, there is as yet little general analysis of the economic impact of GI policy
for either particular product lines or particular countries.
It needs to be said that there are significant methodological challenges in separating the impact
of GI policy—which is effectively a regulation about food labelling—from other closely associated
characteristics. It is not a simple matter to isolate the effects of a product’s quality in itself, from the
place it is made, in itself, from the GI label that proclaims the place-product combination is regulated.
Further, a GI labelled product may also carry a trademark and, as will be seen from the literature
reviewed below, the GI and trademark labels not always work in harmony. The lack of useful data
does not make these challenges any easier.
Despite the limited data, there is a voluminous literature on GIs. Given the data limitations,
much of this literature is theoretical or conceptual, drawing conclusions on this basis rather than on
empirically verified data. To the best of our knowledge, so far, there were only a few attempts to
synthesise the evidence-based literature on GIs.
But these existing GI literature reviews focus mainly on the European system and only give general
overviews of the available resources, both in terms of methodologies and disciplines (see Table 1).
None had the primary purpose of assessing the empirical results. Rather they considered the GI
literature from a specific viewpoint (e.g., welfare implications, consumers’ attitudes, or simply the
papers from a given geographical region).
Marchesini, et al. [
9
] conducted a literature review on the perception of agro-foods quality cues
in the international environment, where GIs were one of several quality attributes. In his conceptual
paper R
é
quillart [
10
] reviewed willingness to pay (WTP) research, summarising eight previous studies
on consumers’ willingness to pay for GI products. Barjolle, et al. [
11
] collected the methods used for
evaluating GI systems and summarised the results of the EU funded SINER-GI project designed to
raise GI awareness. Teuber and her co-authors reviewed the (mainly theoretical) economic literature
on GIs, focusing on the welfare implications, concluding with some empirical findings that consumers
prefer local and GI food [12,13].

Sustainability 2020,12, 9434 3 of 24
Table 1. Studies reviewing academic literature on GIs.
Author (Year)
[Reference] Country/Region Issues Reviewed Key Findings
Marchesini et al.
(2007) [9]
Various, EU and
extra EU
Perception of
agricultural product
and foodstuff
quality cues
It is unlikely that the EU GI system would be
recognised outside of Europe.
Authenticity is not always a quality attribute, and
large scale industries can produce products with
high quality where the origin is not the most
important attribute. Other quality attributes (like
animal welfare, protection of natural resources)
might appear in the EU parallel with the GI labels.
Réquillart (2007)
[10]EU Welfare impacts of GIs
PDO/PGI labels, but also trademarks, usually
achieve a higher value on the market, though brands
sometimes realise higher positive values and the GI
and trademark labels interact with each other. But
there are exceptions where the GI label as a signal of
quality is only partially accompanied with a positive
willingness to pay. Some of the studies reviewed
suggested that GIs could result in higher prices, but
these are often needed to cover the additional costs
of GI production. Overall, there is no clear evidence
that the income level of GI farmers would be higher.
Barjolle et al. (2009)
[11]
Various, EU and
extra EU
Methods for assessing
the territorial impact of
GIs and analysis of 14
case studies from the
SINER-GI project
The impacts of GI systems are more linked with
economic or economic-related issues (e.g., market
stabilisation, price premium, value-added in the
producing region) than social and
environmental ones.
Teuber et al. (2011)
[13]
Various, EU and
extra EU
GI welfare
implications,
willingness to pay
Consumer ethnocentrism (belief in the inherent
superiority of products from one’s own region) or
support warranty (supporting local or extra-local
because of characteristics such as fair trade)
dimensions are important for consumers when they
decide about the purchase of local food (or GI
products in particular), but not all consumers prefer
origin attributes per se. Agri-food products have
several quality dimensions beside origin, and they
can be not only complementary but also
substitutable with remarkable trade-offeffects.
Deselnicu et al. (2012)
[14]
Various, EU and
extra EU
Meta-analysis for price
premium of GI
products
In GI production, agricultural products and
minimally processed foods get the highest price
premiums. Processed GI products sold via longer
supply chains usually use trademarks to gain a
reputation premium. Comparing different levels of
GI, PDO products usually receive a higher price
premium, compared to PGI products. When multiple
labelling schemes co-exist (trademarks together with
GI labels) the price premium is lower when the
higher quality is indicated only by a single label.
Herrmann and
Teuber (2012)
[16]
EU
Willingness to pay for
origin labels, economic
rationale of GIs
There is low awareness and recognition of the EU GI
system and PDO/PGI logos among consumers. For
wine and high-quality coffee, a price premium is
generally obtained. There is no uniform pattern as to
how psychographic and sociodemographic
characteristics of consumers affects their attitudes to
GI products. On the other hand, “clear ethnocentric
behaviour” was highlighted in all studies. GI labels
are more beneficial for producers who do not have a
high reputation for their products.
Deselnicu et al. (2013)
[15]
Various, EU and
extra EU
Meta-analysis for price
premium of GI
products
GI captures the highest price premium for products
sold via a short supply chain or having lower added
value. When other tools for product differentiating
co-exist (e.g., branding, trademarks), the price
premium is lower, especially for wines and olive oils.
Stricter regulations result in higher price premiums.
Bienenfeld and Roe
(2014)
[17]
Various, EU and
extra EU
Meta-analysis of
willingness to pay,
especially for organic
foods
Based on 132 observations derived from 29 papers,
for organic products, a higher price premium is
realised by fruits and animal products. From a
methodological point of view, studies using
contingent valuation and based on more
representative samples show higher price premiums.

Sustainability 2020,12, 9434 4 of 24
Table 1. Cont.
Author (Year)
[Reference] Country/Region Issues Reviewed Key Findings
Feldmann and
Hamm (2015)
[18]
USA and Europe
Perceptions and
preferences for local
food
Unlike organic food, local food is not perceived
as expensive.
Consumers are willing to pay a premium for
local food.
Grunert and
Aachmann (2016)
[19]
EU
Consumer reactions to
the use of EU quality
labels
The results are conflicting; overall conclusions cannot
be made. Low levels of awareness with significant
country differences (e.g., higher in South Europe,
lower in the North—in line with the number of the
registered GI products). GI labels can play a role, but
this might be smaller than the role of other quality
attributes (e.g., brand, origin information), and it is
highly dependent on the product and the context.
Evidence on actual perception and use of the labels
in real shopping circumstances is very limited.
Mirna de Lima et al.
(2016)
[20]
Mainly Brazil
Summarising the
findings of GI-related
papers in the Brazilian
CAPES journal
database
The very general conclusions suggest that GIs can be
designed as a tool for protection (both for consumers
and producers), for marketing (helping in product
differentiation), for rural development (maintenance
of local employment and identity), and preservation
(culture, ingredients).
Dias and Mendes
(2018)
[21]
Various, EU and
extra EU
Bibliometric analysis of
the various research
topics connected to GI
Based on bibliometric analysis of academic research
(all disciplines) in the field of food quality labels (501
articles), the papers can be sorted into four clusters,
indicating the most relevant research topics.
Leufkens (2018)
[22]EU Meta-analysis on GI
label effects
Consumers have a highly significant and positive
marginal willingness to pay for GIs. However, the
marginal willingness to pay differs significantly
between the individual GI standards and indicates
great heterogeneity between the protected products.
Caputo et al. (2018)
[23]Mainly EU
Consumers’ attitude
towards traditional
food products
European consumers are not familiar with the food
quality labels of the EU. Origin is not the most
important motivation when buying traditional food
products, though it is often seen as an added value.
Cei et al. (2018)
[24]EU Effects of GIs on local
economic development
GIs can generate value-added, especially at
consumer and retailer levels; however, effects on
producers are not apparent.
Deselnicu, et al. undertook a meta-analysis of GI food valuation studies and found that “brands
[trademarks] and GIs may play a similar role in product differentiation, and thus, be substitutes for each other”
([
14
], p. 43). Using the same approach, Deselnicu, et al. [
15
] collected 25 GI valuation studies and
found the GI price premium to be lower when other product differentiating tools are also available
(e.g., brands/trademarks for processed food products).
Herrmann and Teuber [
16
] collate a number of WTP studies, finding that origin is valued by
consumers, mainly because of quality and cultural preferences. Bienenfeld [
17
] provides a meta-analysis
of willingness to pay, especially for organic foods. Feldmann and Hamm [
18
] reviewed literature
of how consumers react to locally produced foods and found a willingness to pay a price premium.
Grunert and Aachmann [
19
] reviewed the demand side literature, mainly focusing on publications
about consumers’ reactions to the EU quality labels. Papers about the implications of GIs available in
Elsevier’s Brazil database were meta-analysed by Mirna de Lima, et al. [
20
]. Dias and Mendes [
21
]
prepared a bibliometric analysis of articles using EU GI labels. They found that the most investigated
issues were PGI, olive oil, dairy products (mainly cheese) and chemical composition.
Leufkens [
22
] tried to quantify and evaluate the overall marginal consumer willingness to
pay for the European GI label. Using a meta-analysis and a heterogeneity analysis, he found that
consumers have substantial willingness to pay for GIs; however, there are significant differences among
products. Caputo, et al. [
23
] investigated consumers choices regarding traditional food products. They
highlighted the low level of recognition of the EU quality labels. Also, they collected the main drivers

Sustainability 2020,12, 9434 5 of 24
why consumers seek for traditional products and found that sensory appeal and the natural character,
health and safety issues, origin, ethical concerns, price, and convenience are the most important.
Lastly, their results indicated that it is not clear what are the most important factors of consumers’
decision-making process about such products.
To the best of our knowledge, the last GI-related review was conducted by Cei, et al. [
24
], with
particular attention given to the economic effects serving rural development initiatives. They concluded
that GIs could generate value-added at the end of the value chains: for consumers and retailers in
particular. However, on the producers’ level, the results are somewhat mixed and depend on the
specific local conditions. A summary of these identified literature review articles is provided in Table 1.
Against this background, the aim of this paper is twofold. First, it updates current knowledge
about GIs, focusing on empirically validated results. Second, it tries to identify the key areas where
policy-makers need to understand when, where and how GIs work best, updating earlier research
conducted by the authors.
To achieve this, the study includes all agricultural and food GI products (also wines and spirits).
However, non-agricultural and food products, together with services, are excluded and are not part of
this research.
After Section 2describing the methodology, Section 3considers the evidences. First general
results from the grey literature are summarised, then the next part with three subsections covers three
different topics based on the academic literature: the market size for GI products, the effects of GIs on
net producer income involving the issue of price premiums, and the GI-related tools to enhance rural
development and prosperity. Section 4draws together the results and findings, identifying key gaps in
knowledge and identifying critical areas for policy-oriented research.
2. Materials and Methods
To achieve a wide-ranging overview of the empirical evidences on GIs, a comprehensive literature
review was conducted using five significant online databases: Scopus, Web of Science, JSTOR, ProQuest
and Science Direct. The keywords used were “geographic*” and “indication*”. These two keywords
had to be included in the title, abstract, or keywords. Also, the article had to contain empirical data
and/or analysis. The search was restricted to studies in English or with some information available
in English.
We also included key European Commission reports. Finally, our review was also extended to
the references found in the most important articles identified and these references were also added to
our database.
From the online databases, the initial search resulted in 2881 items. To include only relevant
studies in the final literature analysis and to exclude duplicates, we used the online software package
Covidence. After excluding duplicates, 2144 studies remained that might provide empirical findings
on the topics investigated. Figure 1describes how we screened and identified the relevant literature.
The initial screening, based on title and abstract, was independent, but then the authors discussed items
with conflicting outcomes. This first screening resulted in 1841 items being excluded. The 303 articles
remained were also each screened in more depth by at least two of the authors. Again, authors first
screened independently, but then discussed articles with inconsistent results. Items with willingness to
pay methodology and meta-analysis were excluded; however, we reviewed the papers identified in
these meta-analyses. Also, studies that turned out not to be empirical and where no text was available,
were excluded from our research. The final set of relevant studies employing empirical approach
was 80 publications from the systematic literature review, including 5 studies from the grey literature,
trying to cover all the empirical GI literature published until the end of February 2020.

Sustainability 2020,12, 9434 6 of 24
Figure 1. Pathway of the systematic literature review.
Figure 2indicates the empirical GI studies by their year of publication. There is a clear growing
tendency of such studies in recent years, as more than the third of the publications were published
after 2017.
Figure 2.
Empirical GI studies identified in our study, by year of publication. * Our collection covers
studies available at the end of February 2020.

Sustainability 2020,12, 9434 7 of 24
Figure 3indicates the topics of the articles identified. Obviously, a paper can focus on more than
one topic relevant to this study. The numbers clearly indicate that research on GIs is very much about
trying to measure the economic importance of the sector and the number of papers about impacts on
regional prosperity is quite limited.
Figure 3. Topics covered by empirical GI studies.
Most of the studies investigated Italy, France and Spain, the primary beneficiaries of the EU GI
system. Several extra-EU countries were also often studied, in the Americas in particular (Figure 4).
Figure 4. The territorial focus of empirical GI studies.
Researchers mainly focused on the empirical investigation of GI food products, as 73% of the
papers covered GI food products. Wines and spirits together were the topic of 17% of the papers, while
the rest of them covered various product lines.

Sustainability 2020,12, 9434 8 of 24
3. Results
3.1. Grey Literature and Centralised Datasets
One of the most comprehensive reports is conducted by the London Economics. Undertaken for
the European Commission (EC), this report highlighted “the lack of comprehensive data on the number
of PDO and PGI producers, the size of the agricultural land devoted to PDO/PGI production, the value and
volume of production and the value of sales” and noted that this was “a serious constraint to the monitoring and
evaluation of the scheme at national and EU level” ([25], p. 254).
The authors of the London Economics report suggest that the number of registered GI products
can describe market size. This could however be misleading, as the number of registrations can
be influenced by factors such as national procedures and incentives, country-specific institutional
characteristics, different social-cultural contexts, the depth of variety within a particular product group
etc. There will also be substantial differences between registered GIs in the volume of output, its value
and the number of producers. According to the report, the number of GI products is highest in the
Mediterranean EU Member States, also with significant market for these products. The report also
highlighted the concentration of GI registrations in particular food categories, “Fruit, vegetables and
cereals”, “Cheeses”, “Fresh meat (and offal)”, “Oils and fats/olive oils” and “Meat-Based Products”
represented more than 80% of the total number of registrations. It is clear that GI labelling either works
better or appeals more to producers, in some product lines than in others.
Another major data sources are the contracted reports conducted by AND-International and
published in 2008 and 2019 [
8
,
26
]. These reports analyse all the four GI regimes (agricultural products
and foodstuffs, wines, aromatised wines and spirits). Both primary (direct and indirect surveys)
and secondary (centralised datasets) data were included, but it is clear that for some areas only educated
guestimates were available. This underlines the problem of the lack of available datasets on GIs again.
Based on the results of the AND-International reports we can assume that the market share of
the GI products (all the four regimes, excluding Traditional Specialty Guaranteed foods) in 2017 was
around 7% with a sales value of EUR 74.76 billion. GI wines had the highest share in the GI market
with 51%, followed by the food products (35%) and spirit drinks (13%), while the market of aromatised
wines was hardly measurable (around 0.1%). Compared to the first report (with latest data of 2010)
the total sales value of the GI products increased by 37% on an average (an increase of 33%, 65% and
27% and among wines, foods and spirits, respectively). This remarkable growth was mainly caused by
the increased number of new GI products; however, the growth of French, Italian and Spanish wines
and French spirits was also determinative. The reports also found extreme concentrations. Among
wines, 90% of the EU28 sales volume and 95% of the EU28 sales value in 2017 came from France, Italy,
Spain, Germany and Portugal. In case of agricultural products and foodstuffs, PGI products had 58%
share, and only 42% of GI foods sold had a PDO label, while more than half of these GI products
came from only three EU member states (Italy, Germany and France). Among foods, a few product
categories had significant shares: cheeses (36%), meat products (16%), beers (13%), fresh meats (12%)
and fruits, vegetables and cereals (8%) were the five most important categories, altogether representing
85% of the total GI foods. A huge concentration was also identified. For example, out of the 235 GI
cheeses, the Italian, French and Dutch products represented 82% of the total sales value. The GI spirit
market was highly dominated by three products representing 90% of the total market (Scotch Whisky,
Cognac and Irish Whisky). In 2017, the share of GI products exported had reached 42% of the total
sales with 20% of intra-EU markets (e.g., Switzerland) and 22% of extra-EU markets (mostly USA,
China and Singapore). The majority of the exported European GI foods came from France, Italy and
the UK and was pulled by a very few GI products (e.g., Scotch Whisky).
Regarding price premium, the AND reports calculated value premiums, using ex-factory and
wholesale prices, compared to similar products without GIs and weighted by the GI sales volume.
On average, they found 107% value premium for EU GI products, with a slight decrease compared to
the 114% identified for 2010. The authors underlined the importance of French products and wines,

Sustainability 2020,12, 9434 9 of 24
as their contributions to the total value premium is higher than expected. Also, they calculated a higher
value premium for processed products than raw products.
The Aret
é
report [
27
] conducted between the two above mentioned AND-International reports,
confirms their general results based on their few selected cases. The authors found remarkable price
premiums for most of their 13 GI case studies, though with extreme variability in the extent. For GI
agricultural raw materials, the price premium was limited but significantly higher for PDO than for
PGI products. They also found that the producers of the final product usually had more than 70% of
total retail value (and also higher gross margins). This also implies that the primary producers’ share
is more limited (though this is almost the same for both GI and non GI value chains) and therefore the
farmers benefit less than retailers from GI labels.
As an initial step of the research we have also inspected the official databases of the European
Commission dedicated to the GI system. eAmbrosia [
28
] is now the official register of GI products
recognised by the European Union. However, this online database is limited to technical information
(milestones of the GI products’ registration, product descriptions etc.) and neither empirical nor market
data are provided.
EUROSTAT [
29
] is the official EU statistical database and only collects very basic data on grapes
for wines with geographical indication. According to the latest dataset, in 2016, 72% of total grape
producing area was dedicated to produce grapes allowed for PDO or PGI wine production, representing
1.2% of the total EU utilized agricultural area.
The European Commission’s Farm Accountancy Data Network (FADN) is aimed to measure
the income level of EU agricultural holdings and the impact of the EU Common Agricultural
Policy [
30
]. In its publicly available dataset there is no centralized data available on the impact of
geographical indications.
3.2. Academic Literature
3.2.1. The Market Size of GI Products
Regarding the academic literature, only a few studies gave quantitative data on the size of the
market. After introducing these few studies, we cover several related aspects: interaction between
price and quantity, export and import, institutional issues, wine related studies and trademarks.
Arfini and Capelli [
31
] measured concentration in the Italian GI sector, but also explored data on
the size of the market. Although Italy has the most GI registrations (PDO and PGI together) in the EU,
just 15 products generated 90% of the entire Italian PDO turnover. The most important GI products
were cheeses and processed meat products, with substantial differences in average turnover. In general,
firms producing PGI products had higher values than those producing PDO products. Regarding
market destination, PDO products are mainly sold domestically (86%) and other EU markets (8%),
while the PGI products exported are sold in more distant markets (e.g., 43% olive oils shipped with
PGI labels were sold in extra-EU markets).
Even among well-known GI foods, there are remarkable differences in terms of the size of the
market and the value chain. E.g., the Italian Parmigiano Reggiano PDO cheese industry processes the
milk from 300,000 farmers (in contrast, the first Brazilian GI cheese Serro is produced only by around
100 dairy farmers [
32
]) and an annual 3 million wheels of cheese are made by 393 dairies (of which 60%
belong to a cooperative), the Spanish Ternasco de Arag
ó
n PGI fresh lamb meat is produced by many
large cooperative groups but distributed by only three enterprises (of which 66% is a cooperative) [
33
].
In 2007, the Portuguese GI food market was estimated to have a EUR 70 million sales value,
dominated by very small producers. Only about two-thirds of GI product was sold in the real market,
the rest being bartered [34].
The real market performance of PDO cheeses in Italy was estimated by Galli, et al. [
35
],
who examined 11 varieties in 2008. On average, a PDO cheese in Italy had EUR 50 million turnover

Sustainability 2020,12, 9434 10 of 24
with an average production of 6232 tons. Substantial differences existed between products, and only
three of the selected varieties exported more than 20% of their total production.
Also, Italian PDO cheese and olive oil was the subject of the ex-post assessment of Carbone,
et al. [
36
]. Results showed that due to the better connection to the place of origin and therefore reaching
niche market segments, smaller producers had better performance than the bigger ones. On the other
hand, producers with lower-ranked products (based on the authors’ multi-criteria analysis) usually
use conventional distribution channels reaching broader markets with higher volume and turnover.
In Hungary, Jantyik and Török [
37
] used a mystery shopping approach and found a less than 1%
market share of GI foods in the supply of the most dynamically growing discounters.
It is essential to measure the interaction between price and quantity to get a full picture of the
potential market size. In our systematic literature review, we found only one study measuring price
elasticity. Monier-Dilhan, et al. [
38
] compared French PDO and non-PDO cheese varieties, using
home scan data from the period of 1998–2003. Based on their results, the level of price elasticity of
PDO cheeses is similar, or even higher than of non-PDO cheese. The authors also suggest little price
substitutability between these products (PDO and non-PDO); however, they were all in possession of
several trademarks, which might also influence reputation.
Several studies focused on the export-related performances of GI products. Leufkens [
39
] found
that EU GI policy has some impact on trade: PGI has a trade-creating effect in general, while in case of
PDO, only alcoholic products can expect better export performance. On the contrary, the empirical
results suggested that PDO food products and PGI wines instead create trade-diverting effects. Other
empirical results show that GIs play a more significant role in international trade when the importer
has no GI protected product in the same product category [
40
]. For the European cheese industry,
Balogh and J
á
mbor [
41
] found a high level of intra-EU exports, as 80% of the cheese exported by EU
member states are sold in another EU member state. Regarding GI, they found that countries exporting
cheeses with PDO label have a comparative advantage over other countries without GI cheeses.
Belletti, et al. [
42
] investigated the most exported Tuscan GI products and found that for small
scale producers it could be considered as a marketing tool, however, in general, GI is often used as a
tool for defending the existing market positions. Among the selected products, olive oils were the
most export-oriented. PDO olive oils were targeting the intra-EU markets, while ones with PGI label
were usually exported outside of Europe, mainly to the USA. The results also indicated that exporting
firms with their own trademarks had less interest in PDO or PGI labels.
Török and J
á
mbor [
43
] focused on the European ham trade and found that GIs have a trade affect as
exporting countries in possession of PDO/PGI labelled ham had a higher level of comparative advantage.
In Canada, for the cheese market Slade, et al. [
44
] found that GI-related restrictions might benefit
not only the producers/exporters of the GI labelled products but also local/domestic cheeses without
GI, as additional information on GIs might stimulate consumption for all cheeses.
Only limited research investigates (potential European) GI labelled imports. For Thai GI fruit
and coffee products, Wongprawmas, et al. [
45
] highlighted that the European market is already an
important export destination. Although the Thai government set up their GI system to certify high
quality level, results suggest that these products can expect increasing market positions, but that a GI
label alone would not guarantee success. Another Asian study focused on the GI tropical fruit durian
in Malaysia [
46
]. Authors found a significant increase in market share; however, due to the small
size of producers and to the lack of an institutional organisation, currently, there is no opportunity of
attracting export markets. Ghana is among the few African countries certified to export honey to the
EU market; however, the export so far is not remarkable. Beekeepers of Ghana, therefore, would like
to follow the example of the Oku White honey, which has received the African PGI label, resulting
in increasing sales and prices, together with exports to the EU [
47
]. In Chile, neither the national GI
labels nor the public certification trademark is widely used among the producers; therefore they cannot
meet their original expectations to increase market share and to reach export markets [
48
]. Indian GI

Sustainability 2020,12, 9434 11 of 24
rice Udupi jasmine is entirely sold in the domestic market, and experts think that e-commerce might
strengthen the position of this traditional food outside of the producing region [49].
Several studies focused on GI-related institutional issues. Based on the Spanish beef market Bardaj
í
,
et al. [
50
] found that geographical origin and designation of origin are not among the top priorities for
retailers. However, as their consumers care about these logos, they sell GI labelled products.
The well-known PDO Parma ham (“Prosciutto di Parma”) was the subject of research of Dentoni,
et al. [
51
]. In-depth interviews indicated remarkable heterogeneity among ham producers, with smaller
producers in favour of strict PDO regulations (in terms of controls and standards). In contrast, large
scale producers—often producing many non-GI products as well—would prefer more flexibility and
would favour of the establishment of a PGI labelled ham. So far, this latter initiative has not happened.
Kizos and Vakoufaris [
52
] studied the olive oil supply chain of a Greek island. Among small
producers, they recorded a high level of self-consumption (up to 29%). Although Greece has a longer
GI tradition, the vast majority of the olive oil produced in Lesvos Island is sold in bulk, and only a very
small part (less than 1%) marketed with GI labels.
Using value chain analysis, Tregear, et al. [
53
] inspected the case of a Hungarian onion with a
PDO label. Onion is mainly sold as a raw material; therefore, onion producers need to capture higher
margins and access to bigger markets. They found that market orientation is essential, especially for
small producers. Also, diversification might be another way for higher value-added. In practice, it
would mean cooperation with other sectors (tourism and hospitality, in particular) that might have a
positive impact on the market situation of this product.
Considering the case of the few Baltic GI products, Bardone and Spalv
¯
ena [
54
] identified a growing
interest in producing and consuming traditional foods in rural tourism in both Latvia and Estonia.
Here these quality labels are part of the rural tourism and preserve cultural heritage.
Corsican clementines have always targeted a niche market, as they could never compete with
Spanish products sold in huge quantities. However, mainly due to the PGI registration of this
clementine only allowed to be sold with leaves (indicating the freshness of the product), shipments
have started growing again after decades of struggling [55].
Many papers investigated the market size of GI wines. Some studies give exact numbers for
specific wine GIs, as wine and vine statistics are usually quite comprehensive in the EU member
states (e.g., in Germany, Mosel GI wines represents the 10% of the total German wine production [
56
]).
In Brazil, De Mattos Fagundes, et al. [
57
] found that GI registration can stimulate the market performance
of the producers. In the GI region of Vineyard Valley, the number of wineries has more than doubled
following GI registration.
Agostino and Trivieri [
58
] investigated the export performance of quality wines produced in
selected regions of France, Italy and Spain. In these countries, the share of the selected wines in the
total wine export is high, and has significantly higher prices, compared to ordinary table wines. Also,
these high-quality wines have higher export values usually sold in rich importer countries (mainly
in Western-Europe and East-Asia). The authors identified differences as French wines benefit more
from the GI label than do their Italian and Spanish competitors, both in terms of market share and
price level.
The same authors [
59
] tried to estimate the market performance of Mediterranean wines (PDO,
PGI and non-GI) in the BRICS countries (Brazil, Russia, India, China and South Africa), using a bilateral
export model. Their results showed that PDO wines have a high market value due to the high prices
received mainly by French wines, while PGI wines have only a moderate price premium.
In the case of Tuscan wines, participating in food quality schemes (PDO, PGI, organic) might
increase the number of distribution channels, targeting different markets [60].
With a broader context of wines and other alcoholic products, several empirical findings also exist.
Teuber [
61
] investigated a GI apple wine of Germany, both from the supply and the demand side’s
perspectives. According to the producers, protection against free-riders and imitations, together with
the prevention against price erosion, were the main reasons for the GI registration. From the consumers’

Sustainability 2020,12, 9434 12 of 24
side, the research showed low awareness of the PGI labels, and that consumers tend to pay more for
such GI labelled apple wines as they would like to support the local economy. For fruit spirits distilled
in Central-Europe Török and J
á
mbor [
62
] indicated weakening comparative advantages, especially
after the EU accession of these countries after the millennium. Though several Mediterranean GI
spirits (grappa, in particular) are prospering, many of the selected Central-European fruit spirits lost
their European market despite their GI recognition.
Finally, Drivas and Iliopoulos [
63
] gave specific attention to the interaction between trademarks
and GI labels and found a strong correlation between them. Based on data from 13 European countries,
they found that both are mainly used for differentiation, particularly when accessing new markets.
3.2.2. The Price Premium of GI Products
Results from studies investigating price premiums of GI foods differ significantly; therefore, it is
essential to keep the location and the product type in mind when interpreting them. First, the attitudes
of European consumers are presented briefly, then value premiums in different sectors and value
chains are described. The end of this sub-section is dedicated to coffee and wine, where substantial
price premiums are more frequently found for premium products.
Van Ittersum and colleagues, in three studies [
64
–
66
] tested consumers’ preferences for PDO/PGI
products. Based on their findings for 13 protected products from 6 European countries, they found
that consumers interested in local foods are willing to pay a price premium for a GI product. They
also found that low levels of recognition and awareness of these systems among European consumers
limit the added value of GI labels [
66
]. In 2001, they tried to estimate the direct effect of PDO labels on
regional food preferences for Italian olive oil. They found that region of origin and the PDO label have
different influences but mainly for a specific group of consumers. People living in the product’s region
of origin are directly influenced by the region of origin but not by the PDO label itself. Using conjoint
analysis, they found an association between higher price and higher quality, but they did not report
exact measures of price premiums nor of the proportion of consumers willing to pay these. In his PhD
dissertation, van Ittersum [
65
] summarised his results on GI price premiums saying that consumers’
relative attitudes to regional products significantly influenced the premium they were willing to pay
relative to competing products. Similar findings were found later with a Pan-European study [67].
Santos and Ribeiro [
68
] investigated the GI market for olive oil and cheese in Portugal. They
calculated a price premium of 22–30% for three olive oil products, while for cheese 12–23% for two of
the four cheeses examined. For the other two cheeses there was no price premium.
Although country of origin labelling (COOL) generally lies beyond the scope of GI policy,
we thought it useful to include one US study that indirectly addresses some GI issues. We did this
because of the lack of data on US consumer attitudes to products with specific geographical attributes.
Carter, et al. [
69
] report on three US case studies: Vidalia onions, Washington apples and Florida orange
juice. They tried to test the success of COOL as a marketing tool and found no evidence that it leads to
long-term price premiums. They found that in some cases, product differentiation was not an option
because of the characteristics of the product. To benefit from regional attributes, strong control over
supply and market entry is required, and this is almost impossible to achieve when the production
area is large. Last but not least, they found that advertising and promotion contribute to sales success,
but is often not affordable and sometimes legally prohibited.
Hassan and Monier-Dilhan [
70
] tried to study competition between different types of quality
labels. Using a database about the daily food purchases of 8000 French consumers in 2000, they
studied six products with labels such as organic, PDO, PGI, and Label Rouge and several trademarked
products. They found a price premium for all the products sold with only a quality label (PDO, PGI,
organic or Label Rouge). But if the quality label was accompanied by a trademark it had less value in
all the cases except the dry-cured ham.
Belletti, et al. [
71
] calculated the effects of certification costs on the value chains of a PGI olive
oil, a PGI beef and a PDO cheese, all from Italy. They found that both the benefits of the GI label

Sustainability 2020,12, 9434 13 of 24
and the associated indirect costs differed between products. Besides the direct costs of certification
and the more expensive inputs, they identified several indirect costs (e.g., adaption of firm structure,
organisation, production process, cost of bureaucracy) and found that these depend highly on how
strict the registered code of practice is. This had the consequence that the profitability of these products
relies on the form of the regulations.
Bardaj
í
, et al. [
72
] compared two varieties of beef (PGI and non-PGI) in the Navarra region of
Spain. Based on monthly wholesale beef prices between 1996 and 2006, they found that PGI beef
received a price premium of 7% on average and had better price stability. They also found that the GI
product was better able to withstand crises (e.g., BSE) as consumers’ trust was less affected.
In their guide for geographical indications, Giovannucci et al. [
1
] included several case studies
from different countries. They identified price premiums up to 115–145%, but not all products were
able to achieve any premium. Some generalisations from these studies are that price premiums can
only be achieved over the longer term and that not all specialty products will be able to achieve a price
premium based on GI labelling.
The distribution of value-added among supply chain actors was the focus of a study by Roselli,
et al. [
73
]. They investigated an Italian PDO olive oil (Terra di Bari) which represented 15% of the
national PDO olive oil market in 2006/2007. By 2009 the Italian olive oil market faced a severe crisis of
falling prices. Terra di Bari oil had a price premium ranging from 10% to 15% compared to non-GI
olive oils, but among all Italian PDO olive oils, it was among the cheaper ones (with prices 39–55%
lower than average). Regarding the distribution of this price premium, they found that within the
value chain, the primary producers (the olive farmers) benefitted least from the PDO certification.
The extra profit gained from the GI went to the bottling companies and distributors. Although olives
suitable for PDO production are more marketable, prices are only slightly higher than for other olives.
For Terra di Bari oil, the price premium is collected at the higher level of the value chain (olive mills,
packers and brokers). The farmers did not seem to gain any financial benefit from the GI.
Penker and Klemen [
74
] analysed the costs of EU GI registration and maintenance, using the
examples of an Austrian PGI ham and PGI horseradish. They included both direct costs and indirect
costs and tried to link them to indirect benefits such as social capital building, intensified cooperation
with other rural sectors, higher awareness of and compliance with quality standards. They found that
PGI ham, which had a larger output, could afford to subcontract the GI registration process. As a
result, the registration costs could then be financed directly by EU funds. This gives larger groups of
producers a clear advantage over smaller groups both in terms of costs and time required.
Vakoufaris [
75
] tried to identify the socio-economic and environmental impact of a PDO cheese
produced in Lesvos island, Greece. Comparing a non-PDO cheese that is a close substitute and is made
in the same region by the same producers, they found that the PDO milk producers and cheesemakers
do not receive any premium price. Supermarkets, however, gained a slightly higher price. They also
found that the price of PDO certified milk was often lower than average generic milk prices in Greece.
Iraizoz, et al. [
76
] tried to estimate the overall profitability and efficiency of the PGI beef sector in
Spain. Using the EU’s Farm Accountancy Data Network (FADN) dataset, the results show that PGI
production is more profitable in the Spanish beef sector. Regarding efficiency, non-PGI farms have
better technical efficiency scores, while the PGI-farms are better in scale efficiency.
Some studies have tried to calculate GI price premiums for rice in India and Thailand. For India,
Jena and Grote [
77
] found that the production of Basmati rice was more profitable than non-Basmati
varieties but less than the production of sugarcane. For Thailand, Ngokkuen and Grote [
78
] found
that GI producers of Jasmine rice had higher bargaining power than non-GI producers. This potential
impact on prices was found to be due to cooperation between GI producers not to a direct effect of GI
registration. In a comparative study of India and Thailand, Jena, et al. [
79
] found a positive effect of GI
adoption on the welfare of rice producers, especially in terms of reducing rural poverty. There was,
however, no evidence of any GI impact on consumer prices. This lack of an evident price premium
calls into question the benefits of GI production in these cases.

Sustainability 2020,12, 9434 14 of 24
Though food discounters in Hungary target price-sensitive consumers, the limited number of GI
foods available in their product portfolio is sold with a remarkable price premium, 43% on an average,
compared to their closest substitutes [37].
Investigating online sales of fresh produce on the South-Korean market, Lee, et al. [
80
] declared
that indicating GI label as an extrinsic product characteristic might positively influence the sales and
the price of the products.
Albayram, et al. [
81
] studied what determines consumers’ attitudes towards local and/or GI
products in respect of a local and a non-local GI olive oil, both from Turkey. Their results demonstrate
that consumers’ decisions are highly affected both by the quality and by origin. Where both products
are labelled as GI, attributes like brand, package and origin become important. They found that
respondents preferred local to non-local GI products because they considered local GI products better
in terms of both reputation and quality. It was apparent, however, that the higher price paid for the
local GI oil was because it was local not because it was a GI.
For French mountain cheeses (both PDO and PGI varieties) Lamarque and Lambin [
6
] found
a price premium for the GI producers of the milk used to produce the mountain cheese. The dairy
farmers producing for the PDO cheese gained 41% higher prices, while the PGI milk producers received
only 21%, compared to the non-GI average French farm-gate milk prices.
While there are few systematic studies comparing price premiums for quality products between
different food and drink categories, there are a priori reasons for thinking that consumers are willing to
pay a higher premium for wines, and perhaps for coffee, than they are for other food products.
Coffee is an important product for many small countries, and several have established geographical
indications for their coffee, to build a reputation and enter the growing global specialty coffee market.
In Honduras Teuber [
82
] used internet auction data with a hedonic pricing model and regional
dummies. During the first two years, there was no evident impact of the GI label on the price of
Marcala coffee. Latin, South-American and Ethiopian coffees were studied by Teuber [
83
] using a
hedonic price model. Data showed that single-origin coffees gain price premiums of between 20 and
58%. The results suggested that while the country and region of production is essential, these attributes
are less important than the sensory quality attributes for prices achieved at online coffee auctions.
Wines have the biggest GI market world-wide. There is also reason to suppose that consumers
might be willing to pay a higher premium for quality wines than for other agricultural products. It is
therefore worth looking separately at the price premium evidence for wines.
The US wine market was often investigated in terms of origin. Bombrun and Sumner [
84
] analysed
the price determinants of wines in California between 1989 and 2000. Of the 125 different appellations,
they found that 64 had significant price influencing power. For instance, the well-known Napa
Valley wines had an average +61% price premium because of the appellation, compared to standard
“California” wines. Costanigro, et al. [
85
] also tried to estimate the link between the name (origin),
reputation and price premiums for California wines. Based on a dataset of 9,261 observations from
Wine Spectator between 1992 and 2003 they found that for more expensive wines, the specific names
and labels are more valuable than for the cheaper ones. All wines also benefit from collective names.
Schamel [
86
] investigated relative prices in the US market for wines produced both in and outside
the USA to determine the value of the producer brands/trademarks and geographical indications.
The results identified origin as important. On average top quality wines from New World producers
outside the USA never exceeded the prices of average quality wines from the Napa Valley. On the
other hand, the top brands from France or Italy had higher prices than the top US brands. This
was interpreted as meaning that Old World wines still possessed a higher regional reputation in the
US market.
In their study of the Portuguese GI market, Santos and Ribeiro [
68
] include not only wines but
also olive oil and cheese. Using a sample collected from three different types of retailers, and hedonic
price function estimation, they found a statistically significant price premium of between 26% and 46%

Sustainability 2020,12, 9434 15 of 24
for three of the six wines. In respect of the other three wines, they found price premiums of 1–14%,
but these results were not statistically significant.
In both of their papers, Agostino and Trivieri [
58
,
59
] analysed the price and volume effects of GI
labelling for wines from France, Italy and Spain. They found that in rich importing countries, all three
origins have a value premium, caused by both price and volume effects. The price premium was
highest for French wines and somewhat lower for Italy and Spain. Similar outcomes are reported for
the BRICS markets, indicating that the GI price premium exists not only in rich but also in emerging
markets. In the latter study, the French PDO premiums remain the largest, and significantly higher
than the Italian and Spanish premiums. Finally, using historical data for selected French wines, Haeck,
et al. [87] found that GIs have a determining role on prices of some Champagne wines; however, this
was not the case for wines from Bordeaux or Champagne.
3.2.3. The Impact of GI Products on Rural Development
One of the initial goals of EU GI policy is to promote regional prosperity by improving farmers’
income and retaining rural population in less-favored or more remote areas [
2
]. Many studies state
that, for lower-income countries, GI policy has been promoted as an important avenue for raising
producer incomes and to promote rural socio-economic development e.g., [
32
,
47
,
77
,
88
]. In this
sub-section, we review the empirical results from studies that considered the impact of GI products on
regional prosperity.
Most of the studies we found were case studies with little hard data. They focused on issues such
as institutional arrangements and how differences in these affected the likelihood of any increased
income remaining in the original product area.
Through a case study of three Tuscan products (PGI olive oil, PGI beef and PDO sheep cheese)
Belletti, Burgassi, Marescotti and Scaramuzzi [
71
] tried to identify the possible effects of GI products
on rural development. They highlighted that the most crucial goal is to attach any higher GI income to
the GI producing area, rather than further down the value chain. A critical issue is, therefore, what is
the direct impact on the income level of the GI farmers and the indirect effect on local employment.
Additional regional benefits can be gained by attracting consumers to the producing area so that there
are positive spill-over effects from other actors in the local system. In this way, the production of GI
foods can interact positively with tourism and handicraft production. They also point to positive
non-economic effects from the presence of a GI supply chain, such as maintaining traditional production
methods and encouraging social interaction. Based on the example of other well-known Italian and
Spanish GI product Arfini et al. [
33
] highlighted the level of externalities associated with public
goods. In case of the Parmigiano Reggiano PDO cheese and Ternasco de Arag
ó
n PGI lamb meat,
these public goods can be identified not only at the value chain level but also at the territorial level.
Cei, et al.
[
89
] tried to assess the effects of GIs in Italy on the NUTS3 level. They found that a higher
number of GI schemes causes a higher level of value-added, thus possibly it fosters rural development
in these regions.
Tregear, et al. [
90
] took a multi-country approach, looking at two Italian (fresh fruit and processed
meat) and one British (cheese) product. They examined the role that regional food qualification schemes
play in rural development. They found that when local institutions try to involve too many actors
in developing the GI regulations, there is a risk of losing the distinctive local characteristic. This is
because accommodating many actors with different expectations results in too permissive code of
practice. Where this happens, there is a looser connection between the GI product and the region of
origin. Overall, they concluded that policies such as GIs need to be considered as part of an extended
territorial strategy. The success of the GI element depends on a mix of actors and motivations.
Williams and Penker [
91
] conducted 25 in-depth interviews with large retailers and stakeholders
directly involved in producing and or marketing Jersey Royal and Welsh Lamb. The study identified
only indirect impacts on rural development, finding outcomes such as increased transparency and
fairness due to GI regulations.

Sustainability 2020,12, 9434 16 of 24
Tequila is a Mexican GI first registered in 1974 and is not only the oldest Mexican GI but also
perhaps the most well-known non-European GI. Issues related to the product description were
investigated by Bowen and Zapata [
92
], using several rounds of semi-structured interviews with agave
farmers, tequila producers and distributors, government officials, and leaders of farmer associations.
The authors found that the sole production requirement was geographic boundaries. They found
that because the boundaries covered a very large area, including territories without any tradition
and without the required biophysical conditions for cultivating agave, over time the link between the
production locality and quality has been eroded. The GI was not recognised in the USA and Canada
until 1994, and not until 1997 in the EU. Since then demand for tequila has grown, and traditional
agave cultivation and artisanal tequila production has been replaced by modern, industrialised
techniques operated by large (international) companies which have entered the market. The expansion
of the tequila market thus resulted in a substantial shift in control and ownership, accompanied by
concentration, industrialisation, and standardisation. Local actors have lost their influence on tequila
production, resulting in economic insecurity among farm households dependent on agave production.
In their multi-criteria analysis of 11 different Italian PDO cheeses, Galli et al. [
35
] also looked at
rural development issues. In assessing rural development, they considered factors like the share of
production sold on local and regional markets and the presence of local events for the promotion of
PDO products. They found that products with good market performance such as Pecorino Romano
and Gorgonzola had high exports and increasing market share. But this was associated with a low
contribution to rural development (and also low bargaining power and limited product differentiation).
In contrast, small PDO producers of Robiola di Roccaverano, Murazzano and Raschera, with strong
production traditions it had much better outcomes in terms of their contribution to rural development.
By analysing the value chain of GI olive oil in Lesvos island, Kizos and Vakoufaris [
52
] highlighted
that a GI label could help smaller producers achieve higher incomes as they have relatively more
freedom in choosing between supply chains. On the other hand, large bottlers have to cooperate and
satisfy international retailers, so for them, the GI label does not necessarily lead to economic success.
As a consequence, there is less association between large bottlers and regional prosperity.
Similar to the case of tequila, Bowen and De Master [
93
] found that how a GI system was
introduced could be harmful to heritage-based food systems. With their comparative fieldwork in
France and Poland, they investigated several cheeses (Corsican cheese and Comt
é
from France, Oscypek
cheese from Poland) and the multifunctional quality initiatives in the Polish Narew River region. Their
most significant finding was that by pursuing extra-local markets, the production processes changed
and started losing their former characteristics of regional distinctiveness. They found differences
between the three cheese cases. For Comt
é
, heritage and tradition were integrated into a code of
practice that benefited small scale local producers. For the other two cheeses, they found that extra-local
actors played a larger role. This led to the introduction of so-called “invented traditions” designed to
maximise commercial profit—but these were not part of the local production system. Overall, they
suggest that GI initiatives can be a good tool for rural development provided special attention is given
to the social-organisational context when setting up the code of practices.
Another comparative study tried to assess the role of institutional policies supporting quality food
labels using the example of a Mexican sausage (without GI) and the Spanish Iberian Ham (in possession
of several PDO labels) [
94
]. The authors found that that differences in geopolitical context resulted
in disadvantages for the Mexican sausage as they could not achieve the GI recognition. In contrast,
the Iberian Ham, supported by the EU GI policy, has reached substantial development, as the PDO
ham producers became very successful in terms of entrepreneurial vision, capacity building in local
actors, heritage preservation and self-employment
A positive correlation between GIs and regional prosperity was identified by Ngokkuen and
Grote [
78
]. They analysed the impact of GI adoption on household welfare and poverty reduction
among Jasmine rice producers in North-East Thailand. Based on a cross-sectional survey with 541
Jasmine rice producer families (180 GI certified farms and 361 non-GI farms), they found a significant

Sustainability 2020,12, 9434 17 of 24
and positive effect of GI certification adoption on household welfare and poverty reduction. They
found GI producers to have significantly higher consumption expenditures (both annual and monthly)
and a lower incidence of poverty (using national and regional poverty lines). GI farmers also owned
considerably more land, productive assets and vehicles. The education level of the household head was
higher, and GI farmers generally had more social capital (were a member of cooperatives, participated
in village meetings, accessed information on GIs and followed good agricultural practices). However,
the authors highlighted a major limitation of their research—that as the adoption of GI certification
was endogenous. The different outcomes for GI and non-GI farmers could not be interpreted as caused
by the adoptions of GI processes. Despite this, they argued that the positive household prosperity
outcome was a pure effect of the GI certification adoption. Similar results were found for India: Jena
and Grote [77] found that the adoption of Basmati rice had increased household welfare.
In the case of the Malaysian fruit durian, the GI helped to build up its own terroir and to preserve
agro-diversity together with local identity. These were also helpful in promoting a touristic brand for
durian orchard owners [
46
]. Similar results were found in Latvia and Estonia, where the local GI foods
are part of rural tourism. Therefore, the EU quality labels help in the promotion and the preservation
of these cultural heritages [
54
]. In Croatia, the existence of olive oils with protected geographical
indications enables additional recognition of the olive oil producing region; thus, GIs can heavily
contribute to the olive tourism developments [95].
For Indonesian GI coffee Neilson, et al. [
96
] found only a little evidence that current GI schemes of
Indonesia have tangible economic benefits for the producers and the producing region. This is mainly
due to the lack of supportive local institutional settings on a strategic level. However, some intangible
benefits can be identified, mainly the promotion of the sense of regional pride and cultural identity,
but this hardly results in achieving rural development outcomes.
A case study of the Nicaraguan GI cheese Queso Chontaleno highlights problems that are common
in many developing countries [
88
]. The introduction of the Queso Chontaleno GI also meant more
competitive pressure on the local production system. In South America, the introduction of such GIs
has often been found to benefit mostly the local elite and not farmers or cheese producers. In the
Queso Chontaleno case, international organisations assisted with the GI registration, but traditional
producers were not really involved, so the code of practice did not reflect their interests. For example,
there were no provisions for institutionalising the link between product and terroir. Mancini suggests
that for a GI to contribute positively to regional prosperity, three factors are essential. First, it is crucial
to set up proper quality standards to define the method of production. Second, it should be clearly
stated how the GI valorises the producing area (the terroir). Third, there should be a strong collective
organisation to foster cohesion among GI producers.
The case of the Brazilian cheese Serro with an indication of provenance also showed that the
recognition of a GI might stimulate territorial development goals; however, it has many limitations
in several aspects and results heavily depend on other factors. GI is most of all a tool for territorial
development that can encourage cooperation between actors in rural areas [32].
In Japan, among GI farms producing Tonburi, Tashiro, et al. [
97
] differentiated the effects based on
their time horizon. In the short term, GI registration might contribute to the spread of cultural capital
among farmers; however, over a long term, GI and the associated traditional ecological knowledge
negatively affects production maintenance and landscape management.
Lamarque and Lambin [
6
] investigated what GIs can do for the prosperity of marginal mountain
areas in France. They compared a PDO, a PGI and a non-GI cheese using farm surveys. Their results
showed that high standards for the GI cheeses are associated with more extensive agricultural practices,
especially in the case of PDO farmers, though the differences between PDO and PGI farmers are
minor. In this way, the GI schemes can indirectly contribute to retaining population in these regions,
as extensive agricultural practices are more labour-intensive.
Based on the case of Hungarian PDO onions Tregear et al. [
53
] found that the impact of such a
nascent GI on the prosperity of the producing area is very limited. To meet regional development

Sustainability 2020,12, 9434 18 of 24
expectations, the building of effective networks with regional actors external to the value chain (outside
of onion production and distribution) is crucial. Although the onion is deeply embedded in the local
culture (e.g., onion themed attractions like onion themed spa and cultural centre) and this PDO variety
is well known in Hungary, the PDO onion struggles to become the basis for a “basket of goods” rural
development strategy. The reputation of this product is appreciated only locally and in Hungary.
4. Discussion
Our research highlights the fact that there is only very limited relevant empirical economic data
available on the impact of GI policy. In the EU this lack is particularly evident. A major reason is
that the EC has not yet set up any comprehensive dataset to evaluate and improve GI policy—so far,
there is no EU-wide data collection about the production and the markets of PDO and PGI products.
The available official database eAmbrosia (integrating the former DOOR, E-BACCHUS and E-SPIRIT
DRINKS databases) is a simple registration database with no economic data. In the EU, the FADN
system collects accountancy microdata on agricultural holdings reporting harmonised information at
three levels: region, economic size and type of farming. However, the design of the data collection does
not effectively measure the impacts of GI production. The centralised EU FADN dataset is a summary
of the results of national surveys that are not entirely the same, and only a few (e.g., the Italian and
Hungarian) collect data on GIs, mainly about whether the selected farm is producing any GI product.
In some of the Mediterranean EU countries, with the most significant GI production, specific initiatives
exist to gather national market data (e.g., the Italian Qualivita). However, on the whole, we can
conclude that there is a lack of statistics on the EU GI sector, even though other European food quality
schemes (organic production, in particular) are supported with centralised data collection and through
EUROSTAT (the EC’s Directorate-General providing statistical information) easily accessible datasets
are available.
The most fundamental issue is how large the market for GI foods might actually be. This, of course,
depends critically on the consumers’ willingness to pay for these (higher quality) goods. Due to
methodological problems and lack of systematic data, we did not include WTP studies in this particular
review. But the available data do show that the most important GI market is the internal market of the
EU. Nonetheless, despite the well-known European commitment to food quality, GI labelled products
form only a minor part of total EU agri-food production (7% in 2017). There are a few GI products
with both significant market size (domestic and export) and remarkable market share, but these are
a small set of all registered GI products and are concentrated in only a few countries, mainly in the
Mediterranean EU countries.
What the limited available studies so show is that there is considerable heterogeneity between
different GI products and between the outcomes for similar GI products in different regions.
Consequently, it is difficult to determine if there are specific types of product, or specific places,
where GI labelling is more likely to achieve a price premium. This hinders the effective development
of GI policy on the ground. Based on the available data it is not possible to recommend where an
investment in GI labelling will generate a good return. Certainly, many wines achieve premiums
related to quality. But there is as yet no clear evidence as to whether the higher premiums observed for
wines translate across to foods. There are suggestions that regional coffees can obtain good premiums,
but there are many cases where efforts to achieve such premiums by using GI labelling for a coffee has
not (or at least not yet) been successful. There are also suggestions that a small number of meats and
cheeses with global distribution chains, may also achieve valuable premiums.
If one cannot know when a GI label will achieve a higher price for a product, how can one know
the impact of GI labelling policy on farmer prosperity? The studies available do show that farmers can
achieve higher prices—but they also show that this is not a certainty. They show that there are higher
costs associated with producing GI products—intrinsic costs in producing a higher quality product
and indirect costs associated with complying with the GI regulation. But the empirical studies that
address the issue of the impact of GIs on net producer income are insufficient to say when, where and

Sustainability 2020,12, 9434 19 of 24
how this might occur. One issue they do point to, however, is that it cannot be assumed that any higher
net income will flow to primary producers rather than to actors higher up the value chain.
The studies we have found point to a possible pattern where PDOs usually gain higher price
premiums than PGIs and products with higher value-added also generally gain higher premiums.
There were, however, exceptions to this pattern. It was also reported that when different quality labels
are attached to a given product (especially a GI label and a trademark), the value of the GI label can be
low as consumers prefer and/or are more aware of other quality cues.
Given the lack of clear data on market size, price premium and impact on net producer income,
it is not surprising that the material on the role of GIs in regional development is thin when it comes
to hard data. Obviously, some criteria need to be met if GIs are to contribute positively to regional
prosperity: there must be higher net producer income, and this must attach to the farmers or processors
located nearby.
Also, there are other mechanisms that could enhance any positive regional development impact
of GIs. One of the most important indirect impacts can be on regional employment. If the labour
needed for a GI product is significant—as it can be for traditional and labour-intensive production
methods—then a GI can make a positive contribution to regional prosperity. However, care needs
to be taken that this does not simply perpetuate low wages associated with traditional agricultural
methods. Employment generation needs to be accompanied by reasonable incomes.
Positive spill-over effects from other actors in the local system can also be important, for example,
where there are synergies between GI food production, tourism and even handicraft production.
In many regions, a particular regional brand is used across a range of product types and indeed across
industry sectors. How regional branding inter-relates with GI labelling needs more study.
On the other hand, as several papers found, attempting to increase local income by accessing
extra-local markets can result in negative effects on regional prosperity. One conclusion is that great
care needs to be taken in designing and implementing a GI strategy for a product. The GI code of
practice can play an important role via identifying the right geographical boundaries and practices to
ensure a vital connection between the product and the production area. To turn the yields from GIs
into regional prosperity requires consideration of all these factors.
Author Contributions:
Conceptualisation,
Á
.T. and H.V.J.M.; methodology,
Á
.T. and H.V.J.M.; software
Á
.T.
and H.V.J.M.; formal analysis,
Á
.T., L.J., Z.M.M. and H.V.J.M.; investigation,
Á
.T., L.J., Z.M.M. and H.V.J.M.;
writing—original draft preparation,
Á
.T. and H.V.J.M.; writing—review and editing,
Á
.T., L.J., Z.M.M.and H.V.J.M.;
visualisation
Á
.T., L.J., Z.M.M. and H.V.J.M.; supervision,
Á
.T. and H.V.J.M.; funding acquisition,
Á
.T. and H.V.J.M.
All authors have read and agreed to the published version of the manuscript.
Funding:
This paper was supported by the J
á
nos Bolyai Research Scholarship and by the National Research,
Development and Innovation Office project FK124800 “Economical and Social Impacts of Food Quality Schemes
and Short Food Supply Chains in Hungary”. The initial stage of the research was conducted by
Á
ron Török and
Hazel Moir at the Australian National University Centre for European Studies and supported by the Jean Monnet
program of the European Commission.
Conflicts of Interest: The authors declare no conflict of interest.
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