Printed in Austria

V.11-83028–May 2011–100

Adding value to traditional

products of regional origin
A guide to creating an origin consortium

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

Business, Investment and Technology Services Branch
Mr. Fabio Russo
Vienna International Centre, P.O. Box 300, 1400 Vienna, Austria
E-mail: [email protected], Internet: www.unido.org/exportconsortia
Adding value to traditional
products of regional origin

A guide to creating an origin consortium

UNITED NATIONS INDUSTRIAL DEVELOPMENT Organization

Vienna, 2010
Copyright© 2010 of the United Nations Industrial Development Organization (UNIDO)

This document was prepared by the Business, Investment and Technology Services Branch of the
United Nations Industrial Development Organization (UNIDO). It is based on work carried out by Nuria
Ackermann, UNIDO consultant, under the supervision of Fabio Russo, Senior Industrial Development
Officer at UNIDO. The author wishes to express her sincere thanks to Gilles Galtieri, UNIDO Consultant,
for his cooperation and to Gerardo Patacconi, Chief of the Quality, Standards and Conformity Unit at
UNIDO, for his valuable comments.

This document has been produced without formal United Nations editing. The designations employed and
the presentation of the material in this document do not imply the expression of any opinion whatsoever
on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO)
concerning the legal status on any country, territory, city or area or of its authorities, or concerning
the delimitation of its frontiers or boundaries. The opinions, figures, and estimates set forth are the
responsibility of the authors and should not necessarily be considered as reflecting the views or carrying
endorsement of UNIDO. The designations, “developed” and “developing” economies are intended for
statistical convenience and do not necessarily express a judgment about the stage reached by a particular
country or area in the development process. Mention of firm names or commercial products does not
imply endorsement by UNIDO.

This document was translated externally from the original Spanish text.
CONTENTS

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1. Legal protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1. Geographical indications: a legal maze. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2. The art of playing on several fronts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

2. Value-adding groups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1. The collective reinvention of tradition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2. Promoting rural development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3. Origin consortia—freedom of action and dependence. . . . . . . . . . . . . . . . . . . . . . . . . 25

3. Creating an origin consortium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

3.1. Which product to start with . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2. How to launch an initiative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.3. How to prepare a specifications document. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.4. Implementing specifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.5. Services offered by the origin consortium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.6. Promoting a traditional product of regional origin. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.7. Expanding the origin consortium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.8. Criteria for applying for a geographical indication. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.9. What kind of external support to seek . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

BOXES
BOX 1 Geographical indications protection systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
BOX 2 Legal means of protecting traditional products of regional origin. . . . . . . . . . . . . . . 10
BOX 3 Institutionalized Geographical Indications (IGI), Certification Marks and
Collective Marks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
BOX 4 Mexico: Cotija cheese from Jalmich. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
BOX 5 Sequential establishment of an origin consortium . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
BOX 6 Switzerland: Rye bread from Valais. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
BOX 7 Italy: The “Melinda” apple from Val di Non . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
BOX 8 The Slow Food movement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

iii
Introduction
The predominant trend in agro-industrial markets reveals a growing interest among consum-
ers in traditional products that are closely linked to a specific place of origin. Both in devel-
oped and developing countries end-customers are showing a greater propensity to purchase
food or agro-industrial products that are deeply-rooted in the various popular cultures, even
if this means paying higher prices. The unprecedented preference for what is perceived as
authentic and genuine is largely a reaction to the rapid changes brought about by globaliza-
tion. The growth in international trade, the proliferation of multinational companies with
standardized products and the gradual homogenization of supply have resulted in a large
number of consumers “turning back”. They refuse to see the mere utilitarian value of an
asset and are willing to pay a premium to consume products that are true to their roots,
retain the quality of the past and have not been “tainted” by what many people regard as
rampant modernization. (Van de Kop and Sautier in: Van de Kop et al. 2006; FAO 2008)

For producers and small and medium-sized companies that operate in the agro-industrial sec-
tor, this new trend signifies a major opportunity, as it frees them from having to compete on
price with generic and standardized products. Moreover, it rewards them for doing well what
to a certain extent they always have been doing: using age-old methods to produce traditional
products that are firmly rooted in a region and have their own special properties. The southern
countries of the European Union (EU) have quickly recognized the commercial potential of
what will be hereinafter referred to as a “traditional product of regional origin”.

For centuries, some French wines identified by the geographical name of their area of origin,
such as Bordeaux, have enjoyed certain privileges associated specifically with their place of
origin. Moreover, the first precursor of officially protected traditional products of regional
origin, as one knows them today, emerged in as early as 1666. In that year, the parliament
of Toulouse declared that: “Only the inhabitants of Roquefort have the exclusive right to ripen
the product. There is only one Roquefort; that which has been ripened in Roquefort since
time immemorial in the cellars of this village.” (Cambra Fierro and Villafuerte Martín 2009:
330; own translation). However, while traditional products of regional origin have existed a
long time as historical, cultural, economic and social realities, it was not until the early
twentieth century that these products made a legal appearance, so to speak, in Europe itself
(Cambra Fierro and Villafuerte Martín 2009; Van Caenegem 2003). At that time, in Mediter-
ranean countries there began to emerge more and more regional groups of rural economic
operators whose main purpose was to coordinate the production of typical food and wines
characterized by their high quality, and to certify their origin in order to enhance the market-
ing of these products. Private collective initiatives soon received official public support and
recognition. France was the first country in the world to establish a national system to protect
and ensure the quality of traditional products of regional origin, especially wine. A first law
passed in 1919 laid the foundations for the present-day system.

1
adding value to traditional products of regional origin

Since then, in European Mediterranean countries, private and public action have gone largely
hand in hand. Economic stakeholders in specific agricultural areas have been organizing
themselves into groups, in order collectively to enhance the competitive advantage of a certain
local agri-food product, while at the same time fighting to obtain legal support from the
State in order to protect the authenticity of these products, preventing adulteration and
counterfeiting. Gradually, more and more countries have been modifying their legal frame-
works to grant special protection to traditional products of regional origin, by introducing
so-called “geographical indications”. These official marks of origin and quality on the packag-
ing of certified products such as Italian Parmigiano-Reggiano, Colombian Coffee and Greek
Feta, serve as a legal safeguard against fraudulent imitations and also as a promotional and
marketing tool for attracting sophisticated consumers. Excluding wines and spirits, there are
now more than 750 agri-food products with a geographical indication in the EU, with a
large concentration of these still in the Mediterranean area. Over 90% of the food and drink
products come from six countries: France, Italy, Spain, Portugal, Greece and Germany
(Cambra Fierro and Villafuerte Martín 2009; FAO 2008).

Since 1994, when the World Trade Organization (WTO) Agreement on “Trade Related
Aspects of Intellectual Property Rights” (the TRIPS Agreement) took up and defined
geographical indications, there has been a proliferation of these in developing and transitional
countries (Paus 2008). Although up to now, in practice, geographical indications as a legal
concept are still not particularly widespread outside Europe, increasingly more governments,
private institutions and economic operators’ organizations are showing an interest in promot-
ing traditional products of regional origin, as they become more aware of the products’
commercial potential.

In this context, often the main concern of the stakeholders involved is quickly to obtain a
geographical indication. However, too often they ignore the fact that a geographical indication
only serves to identify and protect a product with special characteristics and thus enhance
its marketing; but it is certainly not a miracle means in itself, which can add quality to the
traditional product, or create a market demand for it out of nothing. In fact, what has enabled
some typical local products to conquer the markets has primarily been the tireless collective
value-adding strategy developed within economic operators’ associations. Geographical indica-
tions have certainly contributed to the success of these local products but can hardly be held
ultimately responsible for it. Too often, geographical indications are ascribed benefits that
have nothing to do with the legal instrument itself, but rather with the collective projects that
strive for differentiation that helped obtain it, and which then continue over time. Where the
incomes of different autonomous economic operators depend on the market reputation of
one and the same traditional product of regional origin, partnership collaboration between
the producers concerned, joint standardization of product quality, monitoring of compliance
with agreed production procedures and collective marketing are all key factors for success.
For this reason, starting a project by applying for a geographical indication when the neces-
sary organizational and productive “infrastructure” is not yet in place can sometimes be
equivalent to building a house from the roof down. Although—continuing with the metaphor
—at the end of the construction process, the roof can acquire more, or less, importance.

At the heart of efforts to promote traditional products of regional origin, must therefore be
the establishment of a collective organization. Specifically, one of the most common types of
association in this area is the origin consortium: a group of independent producers and
companies whose aim is to add value to a traditional product of regional origin and act as
a platform for the fair and balanced coordination of interests and efforts in the same value
chain. The reach of the benefits that members can obtain from participating in the joint

2
 a guide to creating an origin consortium

project depends largely on the dynamics of cooperation and functioning of the collective
organization. Similarly, local socio-economic impact and rural development processes may be
enhanced or hindered, depending on how the collective initiative is organized and structured.
These are, incidentally, all aspects which have also been observed in other types of business
association projects.

UNIDO has extensive experience in this area, as it has been encouraging and promoting the
creation of local production systems and company networks around the world for many years.
Special mention has to be made of the programme to promote export consortia, which was,
at the time, designed to facilitate access for small and medium-sized enterprises (SMEs) both
to domestic and international markets. In this area, the role of UNIDO has always been
focused on providing guidance to SMEs during their grouping process, helping them to
develop joint marketing strategies and contributing to the implementation of collective busi-
ness-upgrading and quality-improvement projects in order to enhance competitiveness. With
regard to the various projects that have been developed in Latin America, Asia and North
Africa, these mainly involved establishing export consortia in the manufacturing and services
sectors. However, over the past few years more attention has been paid to the needs of opera-
tors in the agro-industrial sector. The system of cooperation and mutual support, which forms
the essence of success behind export consortia, has also enabled small-scale agro-industrial
producers jointly to penetrate new markets. Recently a heightened interest has been observed
among counterparts and beneficiaries in developing more differentiated partnership strategies
that are specifically focused on adding value to traditional products of regional origin. To
respond to this demand, UNIDO will, in future, promote the creation of origin consortia in
the agri-food sector. This document is intended to be a first step in this direction.

The following pages will address, from a practical perspective, the factors that need to be
considered in order effectively to support the promotion of, and adding value to, a traditional
product of regional origin. While this document is dedicated primarily to association processes,
it was deemed essential to clarify concepts and elucidate the legal implications of geographical
indications, particularly by putting them into perspective with regard to trademark legislation.
The first part of the paper is dedicated therefore to the legal aspects. In the second section,
value-adding groups are defined in general and the promotion of traditional products of
regional origin is discussed. Furthermore the role of typical products in the dynamics of rural
development is highlighted and an initial insight into origin consortia is provided. The third
part, which is the methodological component of the document, deals with the various issues
that must be considered when creating and developing an origin consortium. This section
discusses the factors that determine, firstly, the extent of the socio-economic benefits that
consortium members can obtain through their involvement in the joint initiative and secondly,
the degree of success a traditional product of regional origin may achieve in the market. It
specifically addresses: the desirable characteristics of the product to be promoted; methods
for launching a collective value-adding initiative; procedures for jointly developing and imple-
menting common production rules; services an origin consortium can offer; ways of collectively
promoting the product; the issue of expanding the origin consortium; the criteria for applying
for a geographical indication; and the importance of external support. Although the document
includes theoretical considerations, it is action-oriented and focuses on topics applying in the
field. This objective is borne out in the many case studies provided in the text.

The following paragraphs focus exclusively on traditional products of regional origin, although
many of the aspects discussed can be extrapolated to organic or fair trade products. These
products bank on providing another kind of added value and seek to satisfy other needs, but
the sales strategy and how the consortium is structured are somewhat similar. In addition, it

3
adding value to traditional products of regional origin

should be noted that although in reality the vast majority of traditional products of regional
origin come from the food sector or, by extension, the agro-industrial sector, there are also
many others that belong to the manufacturing sector, such as certain typical traditional
textiles. This document will mainly address products in the first category but this does not
mean that the information provided cannot be applied to the collective value-adding strategies
of other goods.

4
1.  Legal protection
As with all other types of goods sold, traditional products of regional origin can also be
registered under trademark legislation in any country in the world. However, when we refer
to the legal protection of typical products associated with a specific territory, the first idea
that may spring to mind is “geographical indications”. The term “trademark” is widely
understood because of the widespread commercial use of this type of label, but what exactly
is a geographical indication? The primary objective of the following pages is to answer this
question and clarify the legislative implications of this legal concept as compared with that
of trademarks.

1.1.  Geographical indications: a legal

maze
The concept of “geographical indication” refers to an
intellectual property right that is recognized by the legal
bodies of various countries and international organiza-
tions. It identifies and protects products originating in
a specific geographical area, whose characteristics and
reputation are essentially linked to their territorial
origin. Products registered as geographical indications
often consist of place names or designations for generic
products combined with the name of a country, region
or specific place, such as Roquefort, Habanos or
Colombian Coffee. Sometimes traditional names, though not specifically geographic, can also
be protected as geographical indications, provided that the link with a territory is clear;
Greek Feta cheese is probably the best known example of this. Although there are hi-tech
industrially manufactured goods with a geographical indication, such as “Swiss” watches, most
certified products belong to the food or agro-industrial sector (Anders and Caswell 2009;
O’Connor and Co. 2007; Eidgenössisches Institut für Geistiges Eigentum 2003). In practice,
products which have achieved recognition of their uniqueness usually have a seal of authen-
ticity, which enables consumers to identify them as having a geographical indication. This
helps to position the products in a higher market segment than that of cheaper and less
sophisticated substitutes that do not carry the label. In addition, registering the product as a
geographical indication protects it from fraudulent imitations and copies.

However, defining the term “geographical indication” precisely is difficult, since there is no
universally accepted definition and perhaps the only parallel is in the area of industrial design,
where the laws differ greatly from country to country (Escudero 2001). According to the
TRIPS agreement, which is applicable in the 149 signatory countries of the WTO and which
is undoubtedly the most important multilateral document to date in this field, “geographical

5
adding value to traditional products of regional origin

indications are [...] indications which identify a good as originating in the territory of a
member, or a region or locality in that territory, where a given quality, reputation or other
characteristic of the good is essentially attributable to its geographical origin.” (Art. 22). In
practice, what is and what is not a geographical indication is necessarily a matter of inter-
pretation. It is the competent authorities in each state that must decide if the attributes or
the reputation of a product are due essentially to its territorial origin and whether the product
in question should be registered in the country and deserves special protection by virtue of
its origin (Thevenod-Mottet in: Gerz et al. 2008).

The TRIPS Agreement obliges member countries to establish the necessary legal means to
prevent unfair competition and passing off of geographical indications, but does not specify
the protection systems to be implemented. In fact, there exists a wide variety of legal
frameworks and even significant differences between the legal systems of the major export
destinations. While countries such as the United States and Australia govern geographical
indications by the rules applicable to trademarks, the EU has established a specific sui generis
system (special legislation) for this type of intellectual property rights, which offers greater
protection than that granted to trademarks. There are also countries that rely mainly on
consumer protection laws or unfair competition and passing-off laws to protect traditional
products of regional origin. These legal regimes, however, rather than protecting a geographical
indication as such, serve primarily to remedy abuse case by case.

The fact that a given sign or a certain trademark meets or does not meet the function of a
geographical indication depends on what is established by the various national laws. For
example, a traditional United States product of regional origin protected by a certification
mark can be considered as a geographical indication in the United States, whereas in the EU,
a product that is registered only under trademark legislation will never be recognized as a
geographical indication. In the EU, a typical product can legally qualify as a geographical
indication only if it is protected under the sui generis system. Furthermore, there may also
be countries, such as Mexico, where certain types of trademarks as well as sui generis protec-
tion are considered legal means for official recognition of geographical indications (Cambra
Fierro and Villafuerte Martín 2009; WIPO 2002; Olivas Cáceres 2007; Poméon 2007; Riveros
et al. 2008).

Currently, two international trends can be observed as regards the legal protection of
geographical indications. Firstly, various countries, particularly in the EU, are increasingly sup-
porting the mutual recognition of the respective national regulatory systems rather than calling
for full legal equivalence (Marette et al. 2007). Secondly, more and more countries, such as
Colombia, Mongolia, Venezuela (Bolivarian Republic of) and People’s Democratic Republic of
Korea, are moving away from the trademark system and adopting, or creating, sui generis
systems to protect geographical indications (Olivas Cáceres 2007; O’ Connor and Co. 2007)

As it is not possible to provide a precise and universal definition of the concept of a

geographical indication, from here on the geographical indications protected as such in their
countries of origin by means of whatever legal system, will be called “recognized geographical
indications”, while the subcategory of geographical indications existing around the world,
registered under a sui generis system in their respective countries, will be called “institutional-
ized geographical indications”. According to the present definition, all “institutionalized
geographical indications” are “recognized geographical indications”, but not all “recognized
geographical indications” are “institutionalized geographical indications”, as not all countries
have established a sui generis system of protection.

6
 a guide to creating an origin consortium

BOX 1.  Geographical indications protection systems

ducts of re
pro g All RGIs1 protect traditional products of regional
RGIs1 origin, but not all traditional products of regional
al

ion
Tradition

origin have the legal status of RGIs.2

al
origin
IGIs2
All IGIs are RGIs. But not all RGIs are IGIs, since
not all countries have a sui generis system (special
legislation).

Source: adapted model; Thevenod-Mottet in: Gerz et al. 2008

1
RGIs = Recognized Geographical Indications 2 IGIs = Institutionalized Geographical Indications

A)  Recognized geographical indications under trademark legislation

There are no IGIs under this legal system. The RGIs

Traditional are protected under the trademark legislation.
Other
products/ Trademarks RGIs products of All RGIs are trademarks, but not all registered
regional origin
services trademarks have RGI status. Traditional products of
regional origin can only be protected as trademarks
with or without RGI status.
Source: own elaboration

B)  Recognized geographical indications under a sui generis system

Under this legal system all RGIs are IGIs, since

Traditional there is only protection under the sui generis
Other products of
products/ Trademarks
system (special legislation).
regional origin
services IGIs are protected under a different system than are
IGIs trademarks. Traditional products of regional origin
can be protected as trademarks and/or as IGIs. A
Source: own elaboration product protected only under a trademark cannot
have RGI status; it is necessary to register as an IGI.

C)  Recognized geographical indications under a mixed system

Under this legal system models A) and B) coexist.

Traditional There are RGIs protected under the trademark
Other products of system and RGIs protected under the sui generis
Trademarks RGIs
products/ regional origin system. Not all RGIs are IGIs, since not all are
services
IGIs protected under the sui generis system.
Traditional products of regional origin can be pro-
tected as trademarks with or without RGI status
Source: own elaboration
and/or as IGIs.

7
adding value to traditional products of regional origin

1.2.  The art of playing on several fronts

The requirements and conditions that a product and its name have to meet to obtain protec-
tion vary considerably from country to country, and as a result, it is often the case that the
same product in some markets is recognized as a geographical indication, while in others, its
name only obtains protection, in the best-case scenario, as a trademark. Meanwhile, in coun-
tries such as Thailand, Malaysia or Indonesia, for example, handicraft and industrial products
can aspire to a geographical indication, whereas, in EU states, only agricultural and agri-food
products can achieve recognition (Wattanapruttipaisan 2009).

The TRIPS Agreement also differentiates between various product categories and establishes
different regulations and levels of protection accordingly. Wines and spirits benefit from much
wider protection than that awarded to other products (Art. 23). The TRIPS Agreement, in
general, only requires that the product designation does not mislead the consumer as to where
the product was produced. The designations “Ceylon Tea produced in Malaysia” or “Buffalo
Mozzarella made in Columbia” are allowed, as they clearly indicate the true origin of the
product and therefore avoid any confusion. In the case of alcoholic beverages, however, use
of a protected name is categorically prohibited for products manufactured outside the original
territorial limits. It is therefore not allowed to sell “German Champagne” or “Chianti wine
produced in Chile” (Grazioli in: Gerz et al. 2008). However, once again, differences exist
among the legal frameworks of the various signatory countries of the TRIPS Agreement. Not
all national legislations are so permissive; under sui generis systems often the names of all
geographical indications, without exception, are fully protected.

The TRIPS Agreement also establishes other exceptions with respect to the protection of
geographical indications, which make application of the treaty even more flexible. Firstly,
protection of geographical indications in a particular country should not prejudice the rights
of existing identical or similar trademarks or rights of use established in good faith. Secondly,
a product with a specific designation will be recognized as a geographical indication only if
the term for which registration is sought does not constitute a generic name in a particular
country. This can pose a problem, as illustrated below.

The word “Emmental” refers to a geographical area in Switzerland which has given its name
to a cheese coming from that region and famous for its characteristic holes. “Emmentaler”
cheese was registered in 2002 in Switzerland as a geographical indication, but it will never
be able to obtain the same protection in other European markets, since the EU considers
that the name “Emmentaler”, and its various translations, have today already acquired a
generic character. Consequently, the designation as such, cannot be registered unless it is
combined with an additional place of origin, as in the case of the protected German cheese
“Allgäuer Emmentaler”.

Almost the opposite can be said of the South African red tea “Rooibos”. In the domestic
market the name is considered a generic term and currently cannot aspire to any form of
trademark protection. However, until recent years, a South African company was exporting
the product to the United States under the protection of the legally registered trademark
“Rooibos”. In principle, there would be a strong possibility of the tea being recognized as a
geographical indication by a large number of importing countries but, to date, South African
regulations and domestic circumstances have been an obstacle. In fact, according to the TRIPS
Agreement, a product cannot apply for registration as a geographical indication in other
signatory states unless it already has national protection (Gerz y Bienabe in: Van de Kop et
al. 2006).

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 a guide to creating an origin consortium

Given such a varied and disparate global legal landscape, when it comes to deciding whether
or not to promote a traditional product of regional origin it is important to differentiate
clearly between the inherent commercial potential of the product and its prospects of obtain-
ing a geographical indication in the domestic and export markets. Moreover, the decision to
obtain a geographical indication, or any other type of trademark that endorses both the name
and the characteristics of the product (see boxes 2 and 3), often proves to be more tactical
than strategic, as common trademarks can sometimes be an excellent way of protecting a
product and controlling the market at the same time.

Ethiopian coffee is a good example of this. As part of a national public-private initiative led
by the Ethiopian Intellectual Property Office, it was discussed what type of legal protection
would be the most appropriate for successfully marketing the famous coffees produced in
certain areas of the country. The conclusion was that common trademarks would provide
good guarantees. The Ethiopian government applied for the registration in 34 countries of
three coffee brands, “Harrar/Harar”, “Sidamo” and “Yirgacheffe”, from homonymous
geographical areas. The three brands now already have protection in the EU, while in Japan
and the United States only two out of the three have been registered to date (Schüßler 2009).

However, it must be noted that the registration of geographical place names as common
trademarks is legally restricted to very specific cases and is therefore not always feasible.
Registration is possible when a geographical designation is not considered as such in the
country where protection is sought or when the geographical name has acquired a secondary
meaning or is understood to be an imaginary word (WIPO 2001).

The entities behind the traditional products of regional origin which have conquered the
international markets have not focused exclusively on a single legal means of protecting their
products and their product designations, but have shown flexibility and creativity in adapting
to the various legal frameworks in export countries. For example, the Hispanic-Cuban mixed
state company, Habanos S.A., which is responsible for marketing the legendary cigars
from the Caribbean island, certifies the quality and origin of its products with the “Habanos”
seal, an institutionalized geographical indication in Cuba. The different types of cigars
manufactured by the company are marketed under various international, regional, local
and niche trademarks, but all carry the “Habanos” label. This name has been registered as
a geographical indication in several countries, but certainly not in all; in many states the
product’s mark of origin, too, has had to be protected by means of a mere trademark (El
Benni and Reviron 2009).

The secret to the success of traditional products of regional origin is therefore to play the
appropriate legal card according to the circumstances and requirements at the time. The
strategic objective should not be to obtain a geographical indication, but to increase market
share; and for this purpose, trademarks, too, can sometimes prove to be excellent allies.

Boxes 2 and 3 present the characteristics of the various legal means which are commonly
used to protect traditional products of regional origin: (institutionalized) geographical indica-
tions, certification marks and collective marks. All these legal methods of protection have
advantages and disadvantages which should be carefully studied. In fact, the registration of
a(n) (institutionalized) geographical indication is not just a question of legal feasibility,
but also of will and priorities. Further on, section 3.8 will discuss in detail the possible
socio-economic implications of registering this type of mark.

9
adding value to traditional products of regional origin

BOX 2.  Legal means of protecting traditional products of regional origin

The following paragraphs explain the legal implications of the various means of legally
protecting traditional products of regional origin; essentially, a distinction is made between
institutionalized geographical indications and trademarks. Although it is intended to give as
general an overview as possible of the current global legal landscape, the differences bet-
ween the various national protection systems make it impossible to provide descriptions
under which all the legal systems could be classified. Therefore, the information in this box
and in the following may be true for some countries but less so for others.

Institutionalized Geographical Indications (IGIs)

While trademarks are often arbitrary signs that place emphasis on the owner and/or pro-
duct manufacturer, and serve to differentiate their products/services from those of other
companies, geographical indications highlight the geographical origin of a product and the
characteristics the product derives from it. Unlike trademarks, geographical indications are
not only based on human creativity but are also directly related to topography, climate and
other natural factors. It is for this reason that their relocation is prohibited; institutionalized
geographical indications cannot be sold, nor transferred. Moreover, these do not confer
exclusive private property rights on their owners as trademarks do, but instead have a
public, collective character. All producers and/or processors who operate in the place
designated by a geographical indication and whose products meet certain standards of
production have the right to use the indication; the relevant economic operators can also
use their own individual trademark in conjunction with the geographical indication.
In general, it is usually the producers in an area who, totally voluntarily, apply to the
competent authorities for the institutionalization of the geographical indication. Sometimes,
however, the initiative comes from a public entity. The registration application must be
accompanied by the product specifications for which protection is sought; name of the
product; description of the product, the raw materials, the packaging and packing and the
labelling; description of the production methods; history of the product and proof of its
traditional character; delineation of the limits of the relevant geographical area; evidence of
a close link between the territory and the product; and quality standards and inspection
systems. Throughout the subsequent administrative procedure, the various levels of the
state administration concerned examine and approve the specifications in order to later
confer legal status on them. After closing the objection procedure, the geographical
indication is registered and published in a newspaper or official gazette. Legal protection of
institutionalized geographical indications is not carried out in accordance with general
trademark law, but is based on an act of public law (law, decree, ordinance). When a
geographical indication is institutionalized, existing homonymous trademarks lose their
exclusivity, although they can continue to be used. In contrast to what is established by
trademark legislation, the existence of prior intellectual property rights does not impede
the registration of an institutionalized geographical indication.
The protection awarded by an institutionalized geographical indication is usually effective
while the conditions that gave rise to it still persist and, consequently, as a general rule, it is
not necessary to renew the registration periodically, as is the case with trademarks.
Furthermore, the scope of protection granted by institutionalized geographical indications
is much wider than that of trademarks. They protect against any direct or indirect

10
 a guide to creating an origin consortium

commercial use of the registered name; prohibit unlawful use, imitation or evocation of the
registered name, including its use when combined with clarifying words such as “style” or
“type” or its translation into any other language; and prohibit any practice that could
mislead the public as to the true origin of the product, including false indications on the
packaging, internal or external packing, publicity material or documents related to the
product. Given the extensive rights and guarantees that accompany an institutionalized
geographical indication, the costs incurred in obtaining extensive protection are much less
than in the case of trademarks; under trademark legislation many different registrations are
required to obtain the same level of protection. Moreover, in many countries even the
registration as such of an institutionalized geographical indication does not incur any
administrative costs at all.
Using an institutionalized geographical indication without authorization or in a manner
contrary to that prescribed constitutes an offence entailing criminal and civil liability of the
person concerned. While in the case of a trademark the owner is the only entity directly
responsible for initiating a lawsuit and has to bear the costs this involves, in the case of
institutionalized geographical indications it is often the public law bodies themselves that
act in an ex officio capacity. These can start court proceedings for fraudulent use, even in
the absence of an action by the injured party.
As a general rule, public institutions also ensure the establishment of appropriate
structures and mechanisms to check that the products protected by an institutionalized
geographical indication are elaborated, processed and marketed according to the
registered specifications. It is usually public or private certification bodies accredited by
the competent Ministry that are responsible for inspecting and monitoring all stages of
production and marketing; normally the cost of the inspections is borne by the producers
concerned (WIPO 2002; WIPO 2001; Olivas Cáceres 2007).
The terminology used in the various international treaties and in the national legislations as
regards institutionalized geographical indications, often makes a distinction between the
concept of “geographical indication” and the subcategory “designation/denomination of
origin”. These two legal concepts are very similar, although the latter is, in theory, more
restrictive than the former. In practice, however, the differences between them are often
minimal depending on how both concepts have been defined in national legislations. The
EU, which has a more developed regulatory framework in this area, has established the
following differentiation:

Protected Geographical Indication (PGI)

The name of a region, a specific place or, in exceptional cases, a country, which serves to
designate an agricultural or food product: (a) that originates from that region, that specific
place or that country; (b) that has a specific quality, reputation or other characteristic that
can be attributed to its geographical origin; (c) whose production or processing or prepa-
ration is carried out in the defined geographical area.

Protected Designation of Origin (PDO)

The name of a region, a specific place or, in exceptional cases, a country, which serves to
designate an agricultural or food product: (a) that originates from that region, that specific
place or that country; (b) whose quality or characteristics are essentially or exclusively due

11
adding value to traditional products of regional origin

to the geographic environment with its natural and human factors; (c) whose production
and processing and preparation is carried out in the defined geographical area.
These definitions apply only in the EU, since what is considered a “geographical indication”
in one country, may be called a “designation/denomination of origin” in another. Columbian
Coffee is protected under a “denomination of origin” mark in its country of origin, but
it had to be registered as a “protected geographical indication” in Europe for one simple
reason: according to production rules, the roasting of Columbian Coffee does not
necessarily have to be carried out in the “defined geographic area” (El Benni et al. 2009).

Trademark legislation
Apart from the fact that any individual company can protect a traditional product of
regional origin by obtaining a conventional trademark, there are also other categories of
marks that are of particular relevance to producers who wish to implement a joint value-
adding strategy. Specifically, groups of operators often decide to work with certification
marks or collective marks. These types of marks have two key advantages: firstly, their use
is potentially open to a large number of independent producers and companies; secondly,
these seals do not just protect the name of a traditional product of regional origin, but do
also certify the characteristics and attributes of the product. Obviously, the registration of
a traditional product of regional origin under the trademark legislation does not necessarily
imply its recognition as a geographical indication, nor is it always possible to register the
product under a name linked to a territory.
Only some countries safeguard geographical indications through a trademark system.
Conventional trademarks represent in some national contexts legal means of protection
on the basis of origin, but certification marks and collective marks are much more wide­
spread, for the above-mentioned reasons. The name of geographical content of a
traditional product of regional origin can be registered as a trademark and will acquire, in
some countries, the status of geographical indication; but always provided that it does not
violate existing intellectual property rights.The guarantees and rights conferred by this type
of protection are identical to those enjoyed by any other product registered under trade-
mark legislation. Thus, the limitations of this system, compared to the wide protection
afforded by a sui generis legislation, are often the subject of criticism.

Certification mark
A certification mark is a distinctive sign that guarantees that a product/ service meets the
standards and characteristics pre-established by the proprietor of the mark. This could be
an independent company or a private association authorized by the public authorities, or a
public or semi-public institution responsible for certification. The proprietor, who in any
case cannot certify its own products/services, is obliged to monitor and regularly check
that the products/services with the mark manufactured by third parties meet the esta­
blished requirements which may include the origin, raw material, production method,
quality, etc.The contractual link between the owner and the users of the mark is the licence
of use. Producers who meet the pre-established requirements will be authorized by the
proprietor to use the mark and, in general, cannot be excluded. Generally, users of the
certification marks also identify their products with their own commercial trademarks.

12
 a guide to creating an origin consortium

For the proprietor to be able to register its own certification mark with the competent
authorities, the application must be accompanied by rules of use of the mark, which in
some countries should have had prior approval from the appropriate public administrative
entity. The rules of use will establish the characteristics certified by the mark, the products/
services to be certified, the means of monitoring and verification prior to and following the
issue of the licence of use and the regime of sanctions for non-compliance.The “Fair Trade”
mark, the “The Happy Tooth” dental health mark and the “Halal” mark, indicating respect of
religious precepts, are some examples of certification marks that are widely used in the
agro-industrial sector. However, there are also certification marks that protect traditional
products of regional origin by certifying the origin and the production standards for a
particular product.
Especially in the United States, certification marks are a widespread legal means of
recognizing and protecting geographical indications.The proprietor is usually a federal state
or a producers’ association. By law, all economic operators with a legitimate interest who
produce within the geographical production area defined in the rules of use, have the right
to use the mark. There are many products with an institutionalized geographical indication
in the EU, which in the United States are registered under a certification mark that
guarantees both the origin and the qualities of the product; examples of these are
Manchego cheese from Spain and Roquefort from France (Babcock and Clemens 2004;
García Muñoz-Nájar 2006; WIPO 2002; WIPO 2001).

Collective mark
A collective mark is a distinctive sign that certifies that the products/ services of members
of a specific public or private entity with legal personality, meet the standards and charac-
teristics pre-established by the proprietor of the mark, that is to say the collective entity.
Normally, the proprietor does not use the mark for commercial purposes, but to advertise
and promote the products/services of its members who sell their products under the
collective seal. The entity carries out internal monitoring and certifies that the articles with
the mark meet certain characteristics such as geographical origin, production area, raw
material, production method, quality or simply the producer’s membership of the entity.
Members who wish to use the mark submit themselves voluntarily to internal inspection
and agree to abide by the established requirements. In general, the collective mark cannot
be transferred to third parties. For the proprietor to be able to register the collective mark
with the competent authorities, the application must be accompanied by rules of use of
the mark. The rules of use will establish the characteristics of the product/service, the con-
ditions of use of the mark, the persons authorized to use the mark, the conditions of
membership of the entity, the means of supervising the correct use of the mark and the
regime of sanctions for non-compliance. It is common for members to use their own
trademarks along with the collective mark.
As regards traditional products of regional origin, collective marks are relatively common;
and not only in countries where they serve as a legal instrument for the official recognition
of a geographical indication. Often, the respective collective organizations initially decide to
protect their traditional products of regional origin with a collective mark, leaving the door
open so as to later try to obtain protection under the sui generis system. The reasons for
this could include the lack of a regulatory sui generis framework which is sufficiently well
defined for geographical indications within the country or the mere convenience of being

13
adding value to traditional products of regional origin

able to operate quickly under a shared mark, without having to go through the lengthy
process of registering an institutionalized geographical indication. Moreover, many
producers’ associations consider collective marks to be the best means of protecting their
product in the market. For example, collective marks, in contrast to (institutionalized)
geographical indications, allow the number of users of a shared mark to be restricted, as it
can only be used by members of the entity that owns the mark. Although in theory it is not
always easy to prevent new economic operators with a legitimate interest from joining the
owner organization, in practice it is usually not difficult to decide on and exercise control
over the number of producers authorized to use the mark.
Collective marks are also a good tool for protecting agro-industrial products that cannot
apply for institutionalized geographical indications in a given country for reasons as diverse
as the product not being widely known, the bleak economic potential or the limited
level of commitment by operators in the sector. The Italian producers’ associations and the
Italian Chambers of Commerce are registering more and more geographic collective
marks to protect various traditional food products against imitations and forgery (Olivieri
2004; García Muñoz-Nájar 2006; WIPO 2002; WIPO 2001).

14
 a guide to creating an origin consortium

BOX 3.  I nstitutionalized Geographical Indications (IGI), Certification Marks and

Collective Marks

IGI Certification Mark Collective Mark

Objective To identify and protect To certify the qualities, To indicate that 1) the
the true origin of a product attributes, origin, users of the mark are
and the qualities and production methods, etc. members of the owner
reputation associated of the products/ services of entity; and, if relevant, that
with it. third parties. They do not 2) all the products/
necessarily have to certify services of these members
the origin. share certain characteris-
tics (origin, qualities,
production methods, raw
materials, etc.). They do not
necessarily have to identify
the origin.

Function Protects both the produ- Protects the proprietor Protects the proprietor
cers and consumers from from fraudulent use of from fraudulent use of the
fraudulent use of the the mark. mark.
product name.

Ownership Often owned by the State, A third party entity, which A collective entity whose
on behalf of the producers cannot use the mark for its members use
in a given area. The IGI is a own products/ services. the mark.
public good. The proprietor is some­
times a public body.

Users All producers in an area All producers who comply All producers who are
who abide by the specifica- with the rules of use are members of the owner
tions. It is not possible to authorized to use the mark. entity. Membership of the
exclude producers. Local The owner entity generally entity can be restricted
producers who do not cannot exclude producers. and, hence, use of the
comply with the specifica- mark.
tions forfeit the right to use
the protected name.

Registration Appropriate national Trademark Office Trademark Office

Ministry

Legal basis Protection based on an act Protection based on Protection based on

of public law (law, decree, administrative registration administrative registration
ordinance). with the Trademark Office. with the Trademark Office.

Definition General definition Definition drawn up by Definition drawn up

establi­shed on a national the owner, which establis- by the owner, which
or international level that hes the requirements that establishes if mere mem-
specifies the common the products/ services of bership of the collective
characteristics of the third parties have to meet entity is sufficient in order
products with geographical in order to be able to use to be able to use the mark
indication (e.g. EU: PGI + the certification mark. or if members have to
PDO, see page 11) meet additional require-
ments to do so.

15
adding value to traditional products of regional origin

IGI Certification Mark Collective Mark

Administra­ Often shared by public Only the proprietor. Only the proprietor.
tion and and private entities. Certification costs can Reduced certification costs
monitoring  Certification costs are often be high for users. for users if internal
often high for users. monitoring and self-super-
visory practices are
implemented.

Scope of Exclusive use of the name Protection of the name in Protection of the name in
protection for identical or similar combination with a graphic combination with a graphic
products and for product element. Exclusivity cannot element. Exclusivity cannot
attributes. generally be obtained for a generally be obtained for a
geographic designation. geographic designation.
The name is protected
against imitation or Third parties can continue Third parties can continue
evocation even in cases to use the name in to use the name in
where the true origin of translations and with translations and with
third parties’ products is expressions such as “style” expressions such as “style”
specified. or “type”. or “type”.
Third parties cannot
continue to use the name
in translations and with
expressions such as “style”
or “type”.

Relation­ Registration is possible, Registration is only possible Registration is only possible

ship with even in cases where there if it does not prejudice the if it does not prejudice the
other are rights of pre-existing rights of pre-existing marks rights of pre-existing marks
marks marks or rights of use or rights of use established or rights of use established
established in good faith. in good faith. in good faith.
Marks that existed prior to
the IGI lose their Registration based on the Registration does not
exclusivity. “first to file” principle. prevent the designation
from becoming a generic
Registration based on Registration does not term.
principles related to prevent the designation
legitimate interest to use. from becoming a generic
term.
Registration prevents the
designation from becoming
a generic term.

Obligation Rights over the name even Rights to the name if it is Rights to the name if it is
to use if it is not used (e.g. when a used. used.
protected foodstuff cannot
be sold on the market for
health or phytosanitary
reasons).
Area of Production has to Production only has to Production only has to
production be carried out in the be carried out in the be carried out in the
estab­lished territory. established territory if established territory if
Relocation of all stages of established in the rules established in the rules
production is not possible. of use. of use.

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 a guide to creating an origin consortium

IGI Certification Mark Collective Mark

Basis of Often ex oficio protection Only in accordance with Only in accordance with
protection and in accordance with the the private actions of the the private actions of the
private actions of the owner (very high costs). owner (very high costs).
different producers
concerned.

Duration of Often unlimited, while the Often 10 years (renewal Often 10 years (renewal
protection conditions for registration required). required).
remain valid.

Cost Registration costs are often High registration costs. High registration costs.
low or non-existent.
In addition: In addition:

Payment required to Payment required to

renew registration renew registration

Payment required for Payment required for

multiple registrations multiple registrations
(translations of the (translations of the
name, etc.) name, etc.)

Cost of private legal action Cost of private legal action

against fraudulent use against fraudulent use

Marketing The IGI as sign of quality High advertising costs. High advertising costs.
as such, reduces marketing
costs if customers are In some countries, the
generally aware of the certification mark cannot
IGI concept. be used in promotional
material, but only for the
product whose characteris-
tics are certified.

Examples Feta cheese, Parma ham Vidalia onions, Idaho Dominican rum, Melinda
potatoes apples

Sources: Thevenod-Mottet in: Reviron et al. 2009: 24-25; WIPO 2002; WIPO 2001; Addor and Grazioli 2002; O’ Connor
and Co. 2007; Olivas Cáceres 2007
For detailed information about the legal systems of 160 countries, see O’ Connor and Co. 2007 (Part II)

17
2.  Value-adding groups

2.1.  The collective reinvention of tradition

The TRIPS agreement does not go into the subject of the type of legal persons that can opt
for a geographical indication. In some countries, companies and/or individual producers can
apply for this label, however, in many others only groups of economic operators can obtain
certification (Reviron et al. 2009). In the EU, for example, the establishment of a collective
organization that represents the economic operators that produce the product for certification
is, in practice, a sine qua non requirement for obtaining an institutionalized geographical
indication (Paus 2008). In reality, there are many groups whose traditional product of regional
origin has not obtained the distinctive seal, but it is difficult to find items with a geographical
indication that do not have any type of collective organization backing them. The literature
has widely emphasized the essential role played by the groups in adding value to and promo­
ting traditional products of regional origin, particularly with regard to the agro-industrial
sector.

Within a collective organization—here referred to as a value-adding group—members of the

same value chain do not create a new food or agro-industrial proposition but merely adapt
their pre-existing, and seemingly not very economically competitive, traditional handicraft
product to the quality demands of an upper market segment. Thus, for example, through
adopting a niche marketing strategy, a tasty traditional product, though apparently with no
significant added value, ceases to be a mere foodstuff that is part of the popular culture of
a specific region, and becomes a highly differentiated delicacy in the eyes of the end-consumer,
who is willing to pay a higher price for it. The essential mainstay of the strategy, and the
ultimate reason for the product’s differentiation, is its origin and its unbreakable link with
the geographical area it comes from. In short, “the aim of the product strategy, or value chain,
is to commercialize the local culture, to ‘encapsulate’ the territory within one product which
can be directly marketed ...” (Ray, 1998, quoted in Acampora and Fonte 2007: 195; own
translation).

Value-adding groups pursue an “against-the-tide strategy” that allows them to dissociate

themselves, to a certain extent, from their natural competitive environment and reduce their
exposure to the price fluctuations of staple agro-industrial products in international markets.
Agricultural operators in a given area leave aside fierce price competition among themselves
and instead combine efforts to increase the quality standards of the “old” product, reinvent
it and promote its new image based on a shared label linked to the territory, which may or
may not have geographical indication status. Establishing a value-adding group means that
resources can be pooled and an optimum level of production achieved. This, on the one hand,

19
adding value to traditional products of regional origin

justifies the cost involved in creating and maintaining this necessary differentiating image to
increase economic benefits and, on the other hand, makes it possible to achieve the critical
volume needed to access demanding distribution channels (Reviron and Paus in: Gerz et al.
2008; Barjolle et al. 2005; Bramley and Kirsten 2007).

The development pattern presented above describes the approach and logic which inspire
many of the considerations regarding traditional products of regional origin, specifically those
with geographical indication. Approaches often start with an “archetypal” traditional product
of regional origin which is inextricably linked to its physical, social and cultural environment,
but which is not always in line with the existing traditional products of regional origin in the
real world. In fact, many value-adding groups spring up around highly industrialized and
competitive products. These groups are formed of large, economically buoyant companies
whose main aim is quickly to obtain a geographical indication so as to create institutional
barriers to be added to the technical or geophysical ones already in place. The objective is
legally to underpin the monopolist position of the traditional product in the market, prevent-
ing external competitors from continuing to use the same designation for a given product.
Consequently, competition is moved “inside” the official production area, thereby restricting
it to operators and their respective individual brands within that area. Mexican Tequila—the
first non-European product to be protected by an institutionalized geographical indication—is
a good example of an industrial item that is dissociated from its original territory and from
the production system that gave rise to it. Nevertheless, one can generally say that companies
that have well-established brands and ample resources may not feel the need to adapt to a
common strategy within a group, to submit to collective rules or, ultimately, to waive the
freedom enjoyed when acting independently (Bowen et al. 2009; Belletti et al. 2002; Marescotti
2003; Cambra Fierro and Villafuerte Martín 2009; Acampora and Fonte 2007).

It should also be noted that the establishment of an organization, the corresponding increase
in economies of scale and the existence of a collective niche strategy only explain how it is
possible for a large number of agricultural operators in a given area that produce the same
product to earn a good income. However, there is no answer to the question of how they
manage to compete in target markets. The key explanation lies in the way a particular group
is structured and managed. This will be one of the aspects discussed in later sections (Barjolle
and Chappuis 2000).

The functions developed by a collective organization can be several and varied and depend
on, among other factors, its legal form, the number of members, the markets and distribution
channels of the traditional products of regional origin and the existence of a geographical
indication, etc. While some associations maintain a low profile and have very limited respon-
sibilities, others play a fundamental role for their members. Value-adding groups often play
a highly active role in defining and setting quality standards and establishing production
processes for the “reinvented” product. These rules are set out in the so-called “specifications
document”,1 which all members are obliged to comply with. The organization is responsible
for ensuring the implementation of the document and compliance with its contents, and
assists producers in meeting the new quality standards. Moreover, the main functions of the
association also include market development research and promotion and defence of the
common label under which the traditional product of regional origin has been registered.
In this context, many collective organizations decide to apply for a geographical indication.

1
The term “specifications” is generally used to refer to the rules that govern the use of an institutionalized geographical indication.
In conjunction with a mark, there are usually rules of use. Here the word “specifications” is used mainly to designate the rules of produc-
tion agreed between members of the origin consortium, regardless of whether a traditional product of regional origin is protected under
a geographical indication or a mark.

20
 a guide to creating an origin consortium

This usually involves public relations work and exercising due political pressure in order to
obtain state recognition. Once protection has been achieved, the association is responsible for
the representation and custody of the geographical indication. Each of these points will be
discussed in detail in later sections.

2.2.  Promoting rural development

Value-adding groups are often found in socio-
economically marginalized rural areas, whose natural
geographical characteristics make mass producing
agro-industrial products at a low cost either difficult
or impossible. For the farmers and small and medium-
sized (processing) companies (SMEs) operating in
these areas, it is practically impossible to compete indi-
vidually with cheap, standardized industrial products;
cooperation around a differentiation strategy is essen-
tial in order to survive (Barjolle and Chappuis 2000;
Barjolle et al. 2005). The collaboration among rural
operators within a group forms the basis for converting a weakness into a strength, since it
is often the complicated geophysical conditions that give traditional products of regional origin
their unique and special character. The groups are considered as tools for promoting rural
development as they allow exploitation of the latent potential of economically uncompetitive
areas, where mechanization is difficult or costly. The Champagne region in France, for
example, was always a poor and economically deprived area. To cope with the difficult
prevailing weather conditions, vine-growers were obliged to develop particular techniques and
production methods. Nowadays, the area is well known and has a booming economy thanks
to the sales of the famous, special sparkling wine that comes from the region (Van de Kop
and Sautier in: Van de Kop et al. 2006; FAO 2008).

By backing and promoting traditional products of regional origin it is possible to achieve

simultaneous impacts in different areas of rural development. Firstly, handicraft production
methods, which are generally used to produce typical products, usually bring greater rates of
employment and greater job security, as they involve extensive production systems that revalue
local and native knowledge and capabilities. The maintenance of jobs also has repercussions
for demographic development in agrarian areas; the availability of employment opportunities
prevents rural exodus. Secondly, traditional products also have the potential to act as flagships
for their region of origin, thus increasing visibility of previously marginalized areas. In fact,
these products can help encourage rural tourism, by promoting gastronomic tours for example
(Addor et al. 2003; FAO 2008; Wiskerke 2007).

The history of the French cheese, Comté, which has geographical indication status, is highly
indicative. The product’s value chain employs five times more people than that of the generic,
completely industrially-produced Emmentaler cheese in the same area. Furthermore, the qual-
ity of jobs created by the production of Comté cheese is much higher than is the case with
its rival product. Consequently, the rate of rural exodus from the area where the foodstuff
with geographical indication is produced is only half that of neighbouring regions. The perfect
integration of Comté cheese within its local environment has also helped promote tourism
by means of a public-private partnership which has resulted in the Comté gastronomic routes
(Gerz and Dupont in: Van de Kop et al. 2006).

21
adding value to traditional products of regional origin

Furthermore, value-adding groups are also often considered as valuable tools for promoting
a more diversified, profit-oriented and innovative agricultural sector. In fact, it is usually
economic stakeholders whose products are well known in the market for their high quality
who are more willing to invest in improving or, if appropriate, expanding their product range
in order to maintain their competitive position. Another advantage is the quality control
procedures often implemented by groups as a way of ensuring that members satisfactorily
apply the common specifications. The inspections and verifications that involve several, if
not all, the links in the value chain contribute to increased product safety and facilitate the
implementation of traceability systems (Addor et al. 2003; FAO 2008; Wiskerke 2007).

Another point worth mentioning is the important role that value-adding groups can play in
preserving the culinary, cultural and ecological heritage of a given region. These associations
are not only a useful means of safeguarding the traditional skills and knowledge involved in
the preparation and manufacture of a given product, but can also contribute to maintaining
biodiversity, the ecosystem and the landscape. In fact, age-old production processes tend to
be respectful of the environment, although in practice, obviously not all traditional products
of regional origin are produced extensively or according to ancient procedures. In any case,
the final balance of impacts achieved thanks to the groups is usually pretty visible. Case
studies indicate “that origin labelled food alliances provide low ‘negative externalities’ and
high ‘positive externalities’ on the rural production territory” (Barjolle et al. 2005: 117).

The state authorities of the countries that promote traditional products of regional origin and
have geographical indications protection systems are usually aware of the multiple benefits
which may derive from them. For example, one of the explicit objectives of EU policy as
regards geographical indications is precisely to promote development of rural areas. However,
we must not lose sight of the fact that official recognition of a geographical indication for a
typical product can only enhance the socio-economic impacts that are obtained from the
product value-adding strategy, but not create them. Benefits, or losses if this is the case, are
basically always present prior to registration and are derived from the commitment to the
differentiation project itself, and the coordination and performance of a given group (Reviron
and Paus in: Gerz et al.: 2008; Bramley and Kirsten 2007; El Benni and Reviron 2009;
Marescotti 2003; Barjolle et al. 2007).

BOX 4.  Mexico: Cotija cheese from Jalmich

In the late 1990s, when a project was initiated to add value to the authentic Cotija cheese
and to protect it, its disappearance seemed to be a real threat. At that time, the ranchers
of the Mexican mountain range of Jalmich had been producing Cotija cheese, named after
a village in the area, for over 400 years. This typical foodstuff had always been tied in with
the ranchers’ socio-economic system, which was based on livestock farming, shifting culti-
vation of corn and the seasonal production of ripened cheese from cows’ milk. For a long
time, this foodstuff was even a cornerstone of the local economy. However, the process of
urbanization and modernization led to the gradual abandonment of ranches and worsened
sales conditions of the typical artisan cheese which suddenly had to compete on price with
cheap industrial imitations called “Cotija type”. By the end of the 20th century only 200
marginalized rancher families were still engaged in traditional livestock husbandry.

22
 a guide to creating an origin consortium

In remote areas of the Jalmich mountain range, where there were hardly any economic
opportunities and where the difficult geophysical conditions made intensive, industrial
production impossible, the inhabitants found themselves faced with the straight choice
between continuing with the traditional socio-economic system or emigrating. The three
promoters of the value-adding initiative—two Mexican academics and a local Mexican
politician—figured that the only way to preserve the rancher culture and the historic
heritage associated with it, was to reverse the process of devaluation of the authentic
Cotija cheese and to restore its economic importance in order to ensure a decent
income for the producers. Although at the beginning the primary objective was to
obtain a geographical indication for the typical foodstuff, to protect it and differentiate it
from industrial copies, it immediately became clear that the problem was much more
complicated than previously thought.
Just legally protecting the typicity of the cheese made from fresh milk was not going to be
enough. For it to be able to compete in the market, improvements also needed to be made
as regards the consistency of product quality and ensuring that the product was safe for
consumption. Only through innovation could tradition be maintained. It also proved
essential to take the ranchers out of isolation and away from institutional neglect by
bringing them together to form representative organizational structures collectively to
defend the Cotija cheese.
The three promoters began their project by working with eight livestock farmers, who
saw the initiative as a way to preserve their lifestyle, without having to leave their land.
Developing a specifications document was one of the first objectives. In collaboration
with the ranchers, the promoters proceeded to reinvent the product, combining ancient
production practices and local know-how with scientific knowledge.
In 2001, the first producers decided to formalize the grouping process that was gradually
evolving in the Jalmich mountain range under the guidance of the three promoters, which led
to the creation of the Regional Association of Producers of Cotija Cheese (ARPQC; acronym
in Spanish). From then on, the entity served as both a collective ranchers’ organization and
an official representative in dealings with public institutions. The ARPQC grew substantially
over the following years and today almost half the 200 farms in the area are members.
In parallel, in 2002, at the initiative of the three coordinators, 25 neighbourhood groups
were set up as informal organizational platforms so that all the farming families in the
area could voice their opinions and help identify the determining constraints for marketing
Cotija cheese and, hence, for local development. In fact, it soon became evident that
introducing new cheese production and livestock farming practices would not be sufficient;
it was also vital to improve production technology on the ranches and to expand public
infrastructure and coverage of basic services.
As the initiative progressed, it attracted interest from more and more individuals and public
bodies wanting to get involved in upgrading cheese production. It therefore became
necessary to coordinate the technical, financial, administrative and commercial support
activities of the various stakeholders. With this aim, in 2003 the civil association “Pro Sierra
de Jalmich” was created, which gathered together representatives from all parties involved
in the value-adding process for Cotija cheese, including the promoters, the ARPQC,
the neighbourhood groups, municipal and state political institutions and public bodies
responsible for rural, productive and commercial development.

23
adding value to traditional products of regional origin

At that time, the coordinators, in collaboration with the ARPQC, began the process of
applying for the legal protection of the Cotija name. The application for an institutionalized
geographical indication was rejected on the grounds that the name of the traditional
cheese had become a generic term. However, the request for the collective mark “Cotija
region of origin” was more successful and was obtained in 2005. Given that initially it was
impossible to establish the required certification procedures to guarantee compliance with
the rules of use of the mark, this could not be used for commercial activities, which were
only on a local scale anyway. However, having the mark helped publicize the product and
enhance its reputation.

Through perseverance, progress was made over several years in continuous quality
improvement.The commitment of producers and public stakeholders to the project meant
that, little by little, it was possible to introduce best practices regarding milking and cheese
production, institutionalize livestock health checks, improve production equipment on
ranches and expand the road infrastructure. At the same time, the matter of promoting the
Cotija cheese could not be ignored. Under the impetus of the promoters the traditional
foodstuff, which over time had fallen more and more into oblivion, began to make a
reappearance at several local and national fairs. A turnaround point was in 2006, when an
aged piece of Cotija cheese won the prize for “best foreign cheese” in an international
competition in Italy.

It was a combination of a gradual improvement in quality and ranchers’ increasing

awareness of the true value of their product that gave them more power when it came
to negotiating with the wholesalers to whom they had always sold their product. The
wholesale price of Cotija cheese increased by about 50 per cent over the first few years
of the initiative, from 30-40 pesos/kg to 60-70 pesos/kg. This increase benefited all the
producers in Jalmich, including those less committed to the project, who did not wish to
join the ARPQC.

Recently, the initiative has had two new successes. At the end of 2008, the Cotija Cheese
Production Coordination Centre opened, making it the largest ripening cellar in Mexico.
The ranchers finally had the facilities and technological equipment suitable for the
preservation, cutting and packing of the foodstuff under optimal conditions of hygiene.
Furthermore, in the middle of 2009, after several years of formalities, the Mexican Official
Standard (NOM; acronym in Spanish)* was published for Aged Artisan Cotija Cheese. This
was a real milestone, since up to then the NOM for cheese only covered the use of
pasteurized milk in cheese manufacturing. Therefore, the cheese originating from Cotija
could not be categorized under the same standard, as it was made from raw milk. Now,
however, authentic Cotija cheese could be launched onto the domestic and international
markets without any obstacle. An agreement was signed recently with a major Mexican
commercial chain that will buy Cotija cheese at 200 pesos/kg. It is also hoped that external
promotion activities being carried out with public support will result in an export price for
the cheese of up to 400 pesos/kg.
The NOM for Cotija lays the foundations for combating unfair competition from industrial
products, on the basis of the specificity and uniqueness of the cheese.The Mexican Institute
of Industrial Property stated recently that granting an institutionalized geographical indica-
tion for this typical foodstuff within a few years is within the bounds of possibility; all that is

24
 a guide to creating an origin consortium

required is further to improve the hygiene standards on the ranches. Another challenge
that remains to be met is for the producers, and the ARPQC which represents them, to
take over fully the initiative in which the promoters still play a significant role.
Main source: Pomeón 2007
Other sources: Agencia Reforma 2009; Medios Libres 2009; Quadratin 2008; Semanario Guía 2009; Semanario
Guía 2008
* The Mexican Official Standards establish the rules, attributes and production and manufacturing procedures for
different products on a national level.

2.3.  Origin consortia—freedom of action and dependence

There is a wide variety of different types of collective organizations that protect traditional
products of regional origin; the origin consortium is one of the most common of these. In
fact, in the EU, origin consortia,2 followed by cooperatives, make up the most widespread
organizational structures (Barjolle et al. 2005). Both structures can also be found in develop-
ing and transition countries, although in this case private sector groups often carry less weight.
In this context, direct bilateral agreements among economic operators and public intervention
play a very important role in the administration and promotion of traditional products of
regional origin (Paus 2008).

Origin consortia are voluntary alliances of individual producers, companies or cooperatives

in the same value chain whose aim is to “create” and promote a quality product with high
added value. Collaboration around a single product, where all members are involved in the
production process and/or marketing, leads to multilateral dependency between them.
Consortia are a formal means of coordinating these relations of dependency and for long-
term strategic cooperation, without the need to develop a hierarchical integration structure.
The consortium is not usually commercially active; therefore members can maintain their
financial and legal independence and preserve their freedom of commercial, technical and
administrative action within the margins established by the common specifications and, where
appropriate, the internal rules established3 (Barjolle et al. 2005; Barjolle et al. 2007; Reviron
et al. 2004). The degree of independence maintained by the economic operators is consider-
ably greater than that typical of other types of alliances, such as cooperatives. Given the
relative flexibility offered by these groups, the opportunity cost that membership entails for
the various associates is relatively low.

Origin consortia can basically be subdivided into two types of organizations, as follows:

• The interprofessional consortium is made up of members from various links of the same
value chain, such as producers of raw materials, primary processors, secondary processors
and sometimes even wholesalers or retailers. In Europe, the interprofessional consortia
are the most widespread (Reviron et al. 2009; Barjolle et al. 2005).

2
The type of organization referred to as an origin consortium in this document is known by different names in different countries.
In Italy, the term “Consorzio di Tutela” is used more often than “Consorzio di Qualitá”, in France it is usually known as a “Syndicat de
Défense” or “Organisme de Défense et de Gestion”; in Ibero-American countries the common term is “Consejo Regulador”. These
terms are generally used to refer to partnership structures that protect institutionalized geographical indications. In this document,
however, the concept of an origin consortium is used to refer to a certain type of organization that fits the above-mentioned definition,
regardless of whether or not there exists an institutionalized geographical indication.
3
In this context, the Melinda consortium is, of course, an exception (see p. 46).

25
adding value to traditional products of regional origin

• The professional consortium is made up only of operators in the same link of the
value chain. In practice, this type of organization is usually made up of processors and
generally emerges when the linkage between the primary producers and processing com-
panies is weak. The professional consortium often appears in sectors where there are one
or two clear leaders in the market. Even though these leaders may have a market share
of more than 70 per cent, they may still be interested in collaborating with other, smaller,
business entities in order to reach an agreement on product quality and to strengthen
their position in negotiations with public institutions. However, experiences discussed in
some case studies seem to indicate that professional consortia often face problems related
to poor governance and organization. When the consortium’s specifications include provi-
sions that affect more than one link in the production chain, what can happen is that a
professional consortium becomes an interprofessional alliance. In the case of the Italian
Parmigiano Reggiano cheese, what was once a consortium of processors became a larger
interprofessional organization in order to include cheese ripeners (Reviron et al. 2009:
17; Paus 2008).

The size of consortia varies considerably; there are small consortia with just a few dozen
members, and much larger groups comprising hundreds of members. The interprofessional
consortia tend to be larger. The consortia are usually non-profit associations or foundations
with their own legal personality, who ensure equal representation of the economic and sectoral
interests involved. When the traditional product of regional origin obtains institutionalized
geographical indication status, consortia under some national laws can become, to a certain
extent, final custodians of the indication and can be formed into public law entities. The
consortia are managed through an assembly of delegates, where all links in the production
chain are represented, and a board of directors, normally consisting of a chairman, a secretary
and various members. All decisions are taken collectively and completely democratically within
the group; although in practice, this does not mean that the influential capacity of the
different groups of operators is always perfectly balanced. As regards financing, consortia
receive their revenue from membership contributions, payments for services, and public
assistance (Belletti et al. 2007; Reviron et al. 2009).

26
3.  Creating an origin consortium
There are many, varied and often dissimilar case studies on origin consortia, making it
difficult to set standard guidelines that could be widely applied in many countries. Moreover,
most of the cases analysed are from Europe, where the first groups sprang up and where
most of the groups are located today. Attempting to extrapolate the experiences of Europe
to other continents is not always fruitful. In the following sections we do not intend to provide
prescriptive indications to be followed, but rather to highlight the key practical considerations
to take into account when promoting and guiding the creation of an origin consortium.

Something similar can be said about the chronological structuring of a collective value-adding
project for a typical product. Establishing general sequential stages to be completed one after
the other is a difficult task as not all value chains of the various products concerned are
structured in the same way, show the same level of integration between stakeholders or have
the same technical characteristics. Moreover, the primary objectives of the operators involved
in the joint value-adding strategy may vary considerably from one project to another. This is
one of the reasons why we have organized the following chapters thematically rather than
chronologically.

In any case, if we proceed to establish with due caution sequential models that aim to reflect
the paths followed by the various groups, we can distinguish roughly between two possible
routes; one “short” and the other “long”.

When members of a given value chain start out with extensive technical, financial, commercial
and relational resources it may be appropriate to work under an initial “short” methodological
approach that gives full priority to the rapid registration of a collective label (geographical
indication or other shared mark). The consortium originally serves as a platform to coordinate
and carry out the process of obtaining the mark; this means that it has, at the very least, to
draft the specifications, undertake appropriate administrative procedures and, if required,
develop the necessary promotional and lobbying activities for obtaining a geographical indica-
tion. However, at the very latest once the coveted seal has been received, the consortium’s
role becomes more important and it has to assume additional responsibilities since, if the
group is not functioning properly, the geographical indication or the mark is unlikely to have
the desired impact. Case studies on Swiss rye bread (see p. 32) and the Melinda apple (see
p. 46) could fit this category of “short” route.

On the other hand, when operators involved in the manufacture of a certain traditional
product of regional origin do not have the knowledge, skills or the means of production
necessary to meet market requirements, obtaining a geographical indication or other collective
label can hardly be considered a priority, but rather a long-term goal. From a methodological
point of view, the collective group has the task of coordinating, supporting and implementing

27
adding value to traditional products of regional origin

the activities necessary for collectively adding value to the product and transforming it into
an item suitable to be sold on a large scale. The consortium can obviously decide to register
a collective label at an early stage but this is unlikely to have any practical effect, for two
reasons. Firstly, if operators in the production chain do not respect the specifications, they
will not be entitled to work with the mark in question. Secondly, if the owner of the label
does not have the necessary control mechanisms to guarantee that it is being used in
accordance with the specifications, he cannot permit any potential user to utilize it for
business purposes. The case of Cotija cheese illustrates this point well and is an example of
the “long” route (see p. 22).

The time when the collective label is successfully registered and the initial methodological
role assigned to the origin consortium constitute the differentiating features of the two types
of sequential routes. Later, however, both routes coincide. Once a consortium has succeeded
in reinventing the traditional product of regional origin and has registered it under a common
mark, the challenges faced by the group are basically the same. Box 6 shows an approximate
reconstruction of the steps that generally have to be followed when setting up an origin
consortium. Of course, many of these points also apply to other types of associations and are
not confined specifically to origin consortia.

28
BOX 5.  Sequential establishment of an origin consortium a guide to creating an origin consortium

Analysis of the potential of the traditional product of regional origin

(specificity, demand, reputation, production volume, production structure)

Initial informative meetings to promote the origin consortium (democratic integration of representa-
tives from all relevant links in the production chain, identification of leaders of the grouping process, work
with already existing producers’ associations)

Collective definition of objectives (economic objectives: to protect the traditional name of the product,
differentiate the product, maintain an extensive production system, penetrate new markets, increase
income for primary producers; non-economic objectives: to maintain tradition, biodiversity, combat
biopiracy, add value to the territory; legal objectives: obtain geographical indication, collective mark,
certification mark)

Informal organisation of the economic operators’ association

(elect representatives, appoint board of directors, develop internal rules, first contributions to capital)

Collective development of specifications

(according to economic, non-economic and legal objectives; technical/ scientific aspects and practical
know-how to ensure product differentiation, quality and safety)

Collective development of an improvement plan

(plan the technical, organisational and structural changes necessary to reach specifications standards)

Start of improvement plan implementation on an individual/collective level, later followed by imple-

mentation of the specifications (standardisation, traceability, production technologies, business manage-
ment, product safety  search for external funding and technical support)

Legal constitution of the consortium

Process of registering the collective label (study advantages and disadvantages of geographical indication
vs. trademark; to process a geographical indication: lobby institutions, define the production area and, if
necessary, renegotiate specifications with third parties)

Development of a business plan (promotional activities, collective marketing)

Recruitment of a manager for the consortium

Start of business plan implementation (  search for commercial partners that are compatible with
economic and non-economic objectives, search for territorial alliances)

Obtain the collective label (trademark or geographical indication)

Implementation of internal and/or external certification mechanisms to monitor adherence to specifica-

tions (depending on available financial resources; help consortium members to obtain certification  search
for external funding and technical support)

Fully-functioning consortium (coordination of transactions between operators, continuous quality improve-

ment, control of opportunism, management of production volume, promotion, etc.)

Note: The chronological order of the phases for establishing an origin consortium may vary.
Source: own elaboration (designs: http://design-download.blogspot.com/)

29
adding value to traditional products of regional origin

3.1.  Which product to start with

For a traditional product of regional origin to be

successful on the market, it is important that it is
characterized by its high specificity to the geographic
environment in which it is produced (natural, climatic
and/or human factors). An empirical study based on
a sample of products with geographical indication has
shown this to be true. It is important that the item
being sold is differentiated and clearly and objectively
distinguishable from standard substitute products,
both in terms of its characteristics or, if applicable, its
organo­leptic attributes and as regards its designation. It is essential that consumers perceive
and recognize the difference and associate the territory in question with the product (Barjolle
and Sylvander 1999; Boutonnet and Damary in Gerz et al. 2008).

If the planned value-adding strategy aims from the start to obtain a geographical indication,
the item must meet additional requirements. In fact, for a product to be registered under
this legal concept, it must have already achieved a certain popularity and reputation among
a large number of consumers as a quality product originating from a certain region. Moreover,
in the EU and in many other countries that have adopted the European legal model, products
for which geographical indication is sought must have a certain proven tradition (Reviron et
al. 2009).

However, in practice, the standing and roots of a product are not necessarily completely
objective data. Behind a traditional product there is always a history in which legend and
empirical data intermingle. Moreover, “products can become renowned virtually overnight
thanks to targeted advertising campaigns that create an illusion of strong cultural roots. A
good example is Aoste ham, Aoste being in fact just a trademark.” (Berard and Marchenay
2008: 23). Furthermore, even in cases where the historical legacy associated with a foodstuff
is unquestionable, the successful “reinvention” of a product for promotional purposes within
the framework of an origin consortium increases the extent of its popularity. To a large extent,
it will be the differentiation strategy followed by the origin consortium which will gradually
increase the product’s visibility. Thus, when establishing an origin consortium, the requirement
of popularity should be considered in a balanced way.

It can also be helpful to work with a product that could obtain, or has already obtained,
other guarantee seals (organic, fair trade, etc.). Through various certifications it is possible to
respond to the needs and wishes of heterogeneous customer groups at the same time and
thus reach broader market segments. While it is rarely possible to accumulate the premiums
resulting from each label, one should not forget that often there may be synergies between
different certification processes, which help to reduce implementation and monitoring costs.
Traditional products of a given geographical area are often organically and sustainably
produced. Moreover, many origin consortia work in a democratic way, to a great extent meet
the necessary requirements to apply for fair trade certification and market products relevant
to the ethical market niche (Marette 2009; FAO 2008; Reviron et al. 2009). In Indonesia,
for example, as part of a broad initiative whose ultimate aim was to register Kintamani Bali
Arabika coffee as a geographical indication, organic certification was obtained first (Gerz in:
Gerz et al. 2008).

30
 a guide to creating an origin consortium

Furthermore, it is also important to consider the production structure of the traditional

product of regional origin. Any joint value-adding strategy requires sacrifices on the part of
the economic operators involved, and not just in financial terms. They must invest time, make
efforts to coordinate their activities with other stakeholders and be willing to learn and
implement new production practices or technical innovations to increase quality. Even when
it is possible to obtain substantial external financial and technical resources, there is always
an opportunity cost for producers. In some local areas, the socio-economic pressures may be
so compelling that the collective reinvention of the product becomes a necessity. However, in
other cases, the motivation and interest of the stakeholders to embark together on a value-
adding strategy can be very limited; and this not only refers to the well-established economic
operators in the market.

As has been observed in European rural contexts, less competitive primary producers may
also have reasons for not wanting to participate in the initiative. For example, some older
farmers working their fields alone, without family support and with no successor to their
farm, are often reluctant to become involved in ambitious projects (Vuylsteke et al. 2003).
Furthermore, one should not forget that many traditional products are of little economic
importance to their areas of origin and their producers. Often, the operators involved do not
derive their main source of income from the product and only produce it for their own con-
sumption or for additional profit. In these cases, it may be difficult to encourage producers
to get involved in a differentiation and quality improvement project. However, having a pride
in tradition, a concern for biodiversity or an interest in keeping traditional practices alive can
motivate these semi-professional producers to seek ways of protecting the historical legacy via
partnership. Nevertheless, the origin consortium is not necessarily the most appropriate orga-
nizational form in these contexts (Marescotti 2003; Tregear 2004; Carbone 2003).

To predict accurately the likely level of interest of various groups of operators, or to

establish a typology in relation to the same, is obviously impossible and is not the point of
the preceding discussion. Also, important as the motivation of the stakeholders involved may
be a priori, it is not immutable. Through appropriate incentives and good coordination, it is
possible to dispel the doubts that may arise within a certain link in the chain, as illustrated
in the case of Teruel Ham (see p. 39).

3.2.  How to launch an initiative

In Europe, the vast majority of origin consortia came to fruition thanks to the determination
and initiative of some professionals in the value chain of a given product. Often, projects were
supported by some public authorities, although without them becoming the driving force of
the process. The case of Valais rye bread is actually an exception to this rule (see p. 32). This
contrasts with the prevailing trend in developing countries, where origin consortia are
normally the result of initiatives of public institutions, multilateral entities and NGOs. All
these often play a key role in southern countries, as promoters of grouping processes between
agricultural and artisan operators. Moreover, it is often the employees of these entities who
mediate between producers and facilitate the coordination of potential divergent interests.
The figure of group promoter also exists in Europe, but it is generally the members of the
developing consortium itself who recruit an expert to provide guidance and to facilitate the
joint work of the various links in the production chain (Reviron et al. 2009).

Origin consortia generally start out as informal and temporary discussion groups, where
the vision of a producer or leading businessman generally sets the course of the discussion.

31
adding value to traditional products of regional origin

Initially, objectives, interests and common values are identified and the motivations and expect­
ations of the various operators with regard to the future origin consortium are clarified.
Usually, even in the initial informal meetings, important strategic decisions are taken that will
impact in various ways on the different stakeholders and links in the value chain. For this
reason, when the ultimate goal of an initiative is to establish an interprofessional consortium,
representatives from all levels of the production chain should be involved from the beginning;
only in this way will all stakeholders later feel equally committed to the project. The task of
bringing together different stakeholders around a common project may be greatly facilitated
when there is a possibility of working not just with individual operators, but with pre-existing
collective associations or structures, however weak they may be (Sautier and Van de Kop in:
Van de Kop et al. 2006; Barjolle et al. 2005; Reviron et al. 2009; Boutonnet and Damary
in: Gerz et al. 2008; Wiskerke 2007).

Regardless of who the specific economic stakeholders are, there are usually two main groups:
a few artisan or industrial processors and a large number of scattered primary producers.
The former, even though they are competitors, generally feel united through forming part of
the same professional collective. The producers, however, are usually poorly organized and
may have difficulty in perceiving their common strategic interests. Moreover, these operators
often do not understand all the dimensions of the common project and are defensive and
hostile towards the idea of having to comply with stricter production rules and quality
standards (Casabianca et al. 2000).

The role of promoter takes on special importance in this context. The latter must ensure that
at the initial meetings all participants receive the same level of information. When it comes
to discussing key topics such as the product to be reinvented, members’ obligations and the
non-economic objectives of the project, it is essential that those involved in the various links
of the production chain are aware of the likely scope and potential consequences of the
decisions to be taken. Only in this way can they assert their interests from the outset (Barjolle
et al. 2005; Reviron et al. 2009; Boutonnet and Damary in: Gerz et al. 2008).

In the case of Mexican Tequila, for example, a large majority of the farmers who produce
agave—the basic ingredient of the drink—still do not know, long after the mark of origin was
obtained, what the concept of “geographical indication” really means. Because of their limited
knowledge, the farmers have never been aware of the important role they could play in
creating added value, if they were to revalue their traditional farming practices. The lack of
information among producers and their limited influential capacity within the Tequila inter-
professional group have always gone hand in hand (Bowen 2007).

It is worth pointing out that the strong leadership of one or more stakeholders in the
production chain can become a decisive success factor in establishing a solid, well-integrated
origin consortium. However, it is necessary from the outset that the emergence of any
leaders does not impede the involvement of primary producers in the management of the
group (Roep et al. 2006).

BOX 6 .  Switzerland: Rye bread from Valais

The idea of adding value to typical rye bread came about through a broad rural develop-
ment strategy which the Swiss Canton of Valais started to implement in the 1990s. The
reason for promoting the traditional product was to support local economic operators,

32
 a guide to creating an origin consortium

improve the visibility of the Canton in order to attract tourists and to prevent the disappear­
ance of the manufactured foodstuff and its basic ingredient, rye. In fact, the survival of this
bread, which for centuries formed an integral part of the regional diet—rye being the only
cereal adapted to the adverse alpine climate—no longer seemed certain. It was decided,
therefore, to take advantage of the new eating habits of a growing segment of the popula-
tion that was becoming ever more concerned with buying healthy products, and to relaunch
the “poor peasant” bread as a highly-differentiated, dietary niche product.
In 1997, a first tiny discussion group was set up. It was formed of representatives from the
Chamber of Agriculture, the Canton’s Ministry of Agriculture, two regional flour mills and
the regional Association of Bakers.The stakeholders agreed that in order to tackle the main
problem—the decline in rye production—and to improve the competitiveness of the
economic operators, it was necessary to produce and sell standard, artisan rye bread in a
coordinated way. All stakeholders shared the same values and were motivated by the
desire to promote the region’s resources. Even at this early stage, it was decided to work
towards obtaining a geographical indication at a later date.
During the long months that followed, the discussion group started to conduct the neces-
sary technical tests in order to develop the product specifications and outline the structure
of what would later be the interprofessional consortium that exists today. In order to get
the initiative off the ground, it was decided to expand the alliance; more local artisan
bakers, and rye farmers in particular, were needed. In 2000, when rye production had
reached an all-time low, getting farmers involved in the group became an urgent priority.
The fact that the producers had not been involved from the start was a difficult mistake
to correct. These always showed an opportunist attitude towards the project and their
main motivation to join the association was the higher premium they received for rye in
comparison with other cereals.
In the late 1990s, the alliance began to operate efficiently on a productive and promotional
level, but it was not until 2001 that the interprofessional consortium “Rye Bread of Valais
PDO Association” (www.walliserroggenbrot.ch) was established and an independent
profes­sional manager recruited. In 2002, the product started being certified by the
Intercantonal Certification Body, in accordance with the specifications developed by the
stakeholders. All that remained now was to obtain the geographical indication.
The registration process was met with expected opposition from market competitors,
particularly a major Swiss retailer who sold an industrial version of the product and insisted
that the designation “Rye Bread of Valais” was just a generic term. Support for the initiative
from the Federal Ministry of Agriculture was crucial in overcoming the legal obstacles and
obtaining a geographical indication in 2004.
During that period, the project saw its first results. Rye production had more than doubled
in just three years and the consortium already had around 90 members who benefited
from the premium paid by consumers for the typical product with significant added value.
Particularly for small bakeries and the two flour mills who were members, the initiative
clearly helped improve their competitive position in an environment of increasing industrial
competition and concentration of distribution on a national level. The regional marketing
strategy, focused on the typicity and local roots of the food stuff, was proving a success,
and obtaining the geographical indication further contributed to promoting the image of
the product among residents and tourists. Consortium members were not the only ones

33
adding value to traditional products of regional origin

interested in making the rye bread famous; efforts on the part of the public sector and the
regional press in publicizing the traditional products of the Valais Canton and the promo-
tional activities of the “Swiss Association for the promotion of Geographical Indications”
(www.aoc-igp.ch) were other valuable sources of support.
Throughout all its phases the initiative had the organizational, technical, legal, logistical and
financial support of various public entities, which proved vital to its success. However,
the project, which started off as something of a top-down initiative, was then developed
by concerned private operators who were immediately committed to it and established
a strong, well-structured collective group. The consortium operates in a democratic and
inclusive way and is made up of around 80 rye producers, two regional mills, and more
than 60 artisan and industrial bakeries. The members of the Board of Directors represent
the three links in the productive chain. The group’s main responsibilities include: defining
specifications and developing quality standards; interacting with the certifying body for the
centralized payment and management of the monitoring process; defending the geographi-
cal indication; drawing up standard contracts for commercial transactions between
members; setting price guidelines for selling the rye bread; providing technical support
services to members; promoting the product; searching for new members to expand the
alliance; interacting with public institutions and other gastronomic initiatives.
Now that the potential demand for Valais rye bread appears to be covered on a regional
level, and the product has a reputation throughout Switzerland, the consortium is
considering whether to sell the product nationally through wider distribution channels.
If the geographical sales area is expanded, the initiative could eventually become
self-financing. However, establishing business relationships with new partners who are
geographically distant and have little commitment to the socio-economic values of the
project involves risks that must be weighed up in the future.

Sources: Reviron 2005; Reviron in: Gerz et al. 2008; www.walliserroggenbrot.ch

3.3.  How to prepare a specifications

document
The specifications form the basis for collective action
and are the foundation of the origin consortium’s
activities. Apart from the fact that product coding is
generally a basic requirement for registering the
product as a collective mark, certification mark or
geographical indication, drawing up specifications is
also essential in order to guarantee and protect the
particular attributes of a traditional product of
regional origin. The good reputation of a product
with recognized properties can only continue to be exploited commercially if the standard of
quality associated with it is maintained (Thevenod-Mottet in: Gerz et al. 2008). The docu-
ment is not exactly a technical regulation, but a description of the practices to be complied
with and those which are not permitted along the production chain of a typical product.
Obviously, the level of detail in the specifications is never such that it will reveal production
secrets, which might open the way to plagiarism (Reviron 2009).

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 a guide to creating an origin consortium

Although the precise terms of the document are often drawn up at a later stage in the process
of establishing the group, the principles that are to guide future agreements are usually
addressed in the initial stage. The specifications are evidence that agricultural operators, even
though they may be competitors, are truly interested in the joint project and want to commit
to it, as cooperation between consortium members will be organized around this document
(Reviron et al. 2009; Barjolle et al. 2006).

The specifications are, in theory, little more than writing up the pre-existing traditions and
customs in an area associated with the production of a typical product. In practice, however,
its preparation is much more complex. A traditional artisan product is almost, by definition,
a non-standardized product, so it is normal that in a given area quite diverse production
practices co-exist, in terms of raw materials and processing and manufacturing methods
(Berard and Marchenay 2008). “[The] definition of the production process is not a given
fact but the result of a pooling of experience and negotiation between the different members
concerned. Even if the criteria are objective, the technical rules are a complex social
construction [...]” (Barjolle et al. 2005: 108). The various stakeholders must work together
to establish what the product attributes are that constitute its essence, and what characteristics
are accidental, secondary and which, therefore, can be left to the discretion of each operator
without needing to be codified. Both what is stated and what is left unstated in the specifica-
tions may affect certain groups of economic stakeholders positively or negatively. Therefore,
it is common for the coding process to involve major conflicts, especially when the operators
are very dissimilar with regard to size, degree of industrialization and distribution channels
used (Tregear et al. 2004).

Sometimes, for example, “the traditional product” that the larger processing companies want
to protect with a geographical indication under a given name commonly used in a region, is
diametrically opposed to the characteristics of the product processed by small farm operators
under the same designation. In the case of cheese, for example, it is not unusual for conflicts
to arise between industrial operators interested in codifying a product made from pasteurized
milk, and artisan producers who want to continue producing their “traditional” cheese with
untreated milk (Moity-Maizi in: Gerz et al. 2008).

The conditions included in the specifications document should be sufficiently clear and well
defined to underpin product differentiation on the basis of superior quality and be sufficiently
flexible and inclusive to ensure that all economic stakeholders can be included in the com-
mon project without having to give up a marketing strategy based on their own individual
brands. One of the keys to the success of an origin consortium is to maintain a balance
between tight control and flexibility, which makes it possible to preserve competition between
member companies and to cover different market segments (Barjolle and Sylvander 1999).
Furthermore, when drawing up the specifications, it is necessary to leave enough leeway for
operators in the consortium to adapt at any time to new technological and legal changes or
unexpected market trends. “GIs [geographical indications] have the advantage of allowing for
the inclusion of new attributes (e.g. new food safety, animal welfare, and environmental
protection systems) while preserving the basic attributes on which GI differentiation is based
so that premiums will not be diluted... .” (Babcock and Clemens 2004: 14)

However, what is not stated in the specifications document may prove just as problematic as
what is listed in detail. If the document fails to mention what practices should be used
to produce the raw materials, the primary producers’ influence on the decisions taken by
an interprofessional consortium risks to be drastically reduced in the future. In fact, the
negotiating power of different stakeholders belonging to the same production chain is usually
proportional to their contribution to the creation of overall added value. Therefore, it is

35
adding value to traditional products of regional origin

necessary to identify and codify from the outset the factors that affect product quality and
are dependent on the work of producers of raw materials. The contribution from stakeholders
in the various links in the production chain must be valued and recognized by the specifica-
tions to ensure cohesion among all the economic operators. The document should foster the
recognition of existing relationships of mutual dependency among all members; thus prevent-
ing certain groups from being excluded in the future from decision-making on key issues
such as the distribution of profit along the value chain (Boutonnet and Damary in: Gerz et
al. 2008; Bowen 2007).

The specifications document must, at all times, be drawn up in a participatory manner so

that strong bonds can be created between the different stakeholders, which will culminate in
an agreement. In this context, it should be borne in mind that “reaching an agreement does
not mean hitting a compromise (or a bargain), but proceeding on to create solidarity between
the different actors and reconcile their interests.” (Casabianca et al. 2000: 324). As it can
often be difficult for primary producers to make their voices heard in negotiations with larger
processing companies, in the case of interprofessional consortia it is desirable that the
discussions about the characteristics of the product to be reinvented take place first at a
horizontal level, so that the representatives of the various links in the production chain can
better assert their interests when they later have to define the contents of the document
together (Boutonnet and Damary in: Gerz et al. 2008). It is also important that all stakehold-
ers fully understand the difference between the two types of standards that are typically
addressed in a specifications document: the specific voluntary agreements that are directly
related to authenticity and tradition, and the more regulatory or conventional agreements that
guarantee safety and facilitate product marketing (Casabianca et al. 2000).

It should be noted that, while it is true that primary producers are often in a less advanta-
geous position compared to processors, there are obviously cases where the reverse is true.
When there is a shortage of raw materials in the market, the primary producers initially have
a better hand. This is the case, for example, with Austrian pumpkin seed oil, which is
protected by a geographical indication. The specifications document does not establish clear
criteria regarding the quality of pumpkin seeds, which presents a substantial problem for oil
processors. However, given the difficulty of finding enough farmers willing to supply the
precious raw material, processors are in a relatively weak situation (Schwarz 2008).

It is also noteworthy that the drafting of the specifications can influence the achievement of
the non-economic objectives of the origin consortium and can have both positive and
negative impacts on the environment. The specifications document for Moroccan argan oil,
a product in the process of being registered as a geographical indication, establishes the need
to plant new argan trees. As argan trees play an important role in combating desertification,
implementation of the specifications can entail beneficial environmental externalities (Reviron
et al. 2009). In contrast to this is the case of Mexican Tequila. While traditionally nine
different varieties of agave have always been used in the production of the alcoholic beverage,
the inclusion of only one variety of the plant in the specifications meant institutionalizing
monoculture and contributing to reducing biodiversity (Bowen 2007).

In any case, when preparing the specifications document the cost factor must be taken
into account. The document will be nothing but a dead letter if the terms within it are not
implemented and if practical application is not carried out with the required thoroughness.
It is, therefore, absolutely crucial to consider the fact that meeting the requirements of the
specifications involves costs that can be more or less high. The costs incurred by operators
will depend largely on how strict the specifications are.

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 a guide to creating an origin consortium

3.4.  Implementing specifications

Irrespective of the moment of legal formalization of
the origin consortium, it is to a certain extent the
specifications implementation phase that marks the
beginning of the group’s operation and is the first acid
test for the alliance.

Consortium members not only have to adapt their

production processes and corporate structure to the
requirements of the specifications, but also have to
adopt a new organizational pattern based on agreed
standards; something that may prove difficult for farm-
ers and small artisan companies. All this entails monetary costs and time. Moreover, if a
member decides to get involved only partially in the preparation of the “reinvented” product,
it may be forced to maintain separate production lines. Apart from the inefficiencies that may
arise at administration level in this case, it is also possible that the agro-industrial operator
may face the need to acquire new assets to produce, store or transport the two types of
products separately (Belletti et al. 2007).

However, thorough application of the specifications is, in itself, not always sufficient to achieve
the objectives of the consortium and, especially, to receive certain quality marks. In fact, it
is usually necessary to monitor and certify internally and/or externally that all members are
complying with established procedures. Even if self-monitoring by members could be consid-
ered a valid means of guaranteeing pre-established quality standards, under a collective mark
and certification mark, monitoring the activities of users of the mark by the proprietor—if
applicable, the consortium itself—becomes a legally indispensable practice. This is sometimes
also the case with geographical indications; although it should be noted that in this context
many national laws do not accept monitoring procedures within the group, but require an
independent certification body to assess product conformity. In the EU, for example, only
products checked by external bodies can qualify for an institutionalized geographical indica-
tion; European origin consortia have no longer legal capacity to act as ultimate and exclusive
guarantors of quality.

For members of the consortium, having to subject themselves to an internal or external

inspection and monitoring system that it has been decided to implement is not always easy
and may represent a real obstacle. Members will suddenly be obliged to bear the psychologi-
cal costs involved in agreeing to be monitored, and to adhere to the compliance logic of
certification and traceability systems. However, on the other side of the coin, it is worth
noting that is precisely this strict control of the production process that creates the conditions
necessary for the development and maintenance of trust among consortium members.
Even though they may be competing with each other, they know they are united through
their compliance with common quality standards. To avoid jeopardizing this loyalty among
the various stakeholders, it is important that members who do not comply with the agreed
practices are reprimanded or, in extreme cases, expelled from the group (Belletti et al. 2007;
Barjolle and Chappuis 2000).

A well-established monitoring and certification system can enable small farm operators who
join a consortium to sell their products to large and demanding distributors; but only where
the latter consider that the quality system is strict enough as a whole (Barjolle and Chappuis
2000). For this reason, it may be advisable to have an independent certification body carry

37
adding value to traditional products of regional origin

out inspections, as only then can it be guaranteed that the monitoring system is fully credible.
However, the relevance of using these external services must be analysed by the consortium,
in terms of its target market, the legal framework and financial resources available. An inde-
pendent quality control system does not always automatically result in a more advantageous
market position for members.

The external certification body, if any, should be responsible for preparing the so-called
monitoring plan, which details the types of procedures, checks and inspections necessary for
ensuring compliance with specifications. The monitoring plan may include two types of inspec-
tions; firstly, in-situ checks and documents reviews, to monitor and check that the activities,
techniques and processes being followed comply with the self-imposed rules and, secondly,
chemical, physical or sensory analytical tests to verify that the product conforms to the set
parameters. Obviously, the terms of the monitoring plan and, consequently, the administrative
and inspection costs associated with it, depend directly on the content of the specifications.
The latter also dictates to a great extent what links in the production chain will be monitored
and, hence, which economic operators will have to directly assume the costs that normally
accompany certification. In fact, it is not always necessary to scrutinise every step or activity
in the production process separately and sometimes all the inspections focus on a single level
of the value chain, while other links are only required to keep a documentary record to ensure
traceability (Belletti et al. 2007).

Hiring the services of an independent certification body makes sense only when the operators
affected by the inspections have a sufficient financial cushion. It is important to analyse this
aspect at a very early stage in the initiative to create an origin consortium; especially if it is
desired to apply for a quality mark, for which an independent certification system will be
required. In this case, it will be necessary from the outset to include in all calculations and
plans the costs that members will later incur in order to receive a quality conformity certifi-
cate. In addition, it must be ensured that the specifications subject to certification do not
establish requirements that would necessitate payment of excessive sums to monitor them.

To avoid inspection costs becoming too high, or even unaffordable, for small producers and
artisans, certain internal monitoring practices, in addition to external, should be considered;
something which is already usual for organic products. When an internal monitoring system
is well-established in the consortium, the independent certifying body will not have to inspect
each operator separately, but only a sample among them or only those in the final link of
the production chain (Boutonnet and Damary in: Gerz et al. 2008). The Honduran coffee
Marcala, with a geographical indication, is monitored according to this system, which
guarantees complete product traceability from the farm to the export warehouses. The
collective organization is responsible for carrying out all necessary inspections and supervision
along the whole agri-food chain; the external certifying body is only involved in the last stage,
when it issues the final grade for the batch of coffee for export and monitors the packaging
and labelling (Marcala Coffee Regulatory Council 2007).

3.5.  Services offered by the origin consortium

The range of services an origin consortium offers its members depends on, among other
things, the objectives set by the members, their level of commitment to the common project,
the number of members in the alliance, the resources available and, of course, the

38
 a guide to creating an origin consortium

organizational structure. In fact, the tasks assumed by an interprofessional consortium go

beyond those developed by a professional alliance, as the former plays a key role in coor­
dinating relationships between the different links in the production chain. Moreover, the
alliance’s degree of professionalization, as regards organization, also determines the services
it can offer. For the consortium to be able to function satisfactorily, it is necessary to recruit,
sooner or later, regular professional staff who not only manage and get involved in the daily
operations of the consortium but also advance the group in its strategic approach. Therefore,
it is essential for these employees not only to have individual leadership skills but also a
certain degree of institutional independence (Roep et al. 2006; Barjolle et al. 2005; Clara
1999). Below, the origin consortia’s main areas of action are presented, without wishing
artificially to establish a closed list.

A.  Coordination of transactions between operators

A professional consortium is dedicated primarily to horizontal coordination among its

members, but also tries to streamline the business relationships its members have with other
external links in the production chain; for example, it is customary for the organization to
be directly or indirectly involved in the purchase of supplies.

On the other hand, vertical coordination lies at the core of the activity of an interprofessional
consortium. Within an interprofessional group, members negotiate and set master conditions
which have to govern commercial transactions between economic operators at different levels
of the production chain. It is usual to develop model contracts that members can later use
when buying or selling among themselves, without having to make major modifications. The
system benefits all stakeholders in that it reduces transaction costs significantly. In addition,
model contracts are particularly important for primary producers. These usually tend to
operate on the basis of verbal agreements that do not offer them good guarantees and,
moreover, make them vulnerable to the arbitrariness of processors. Particularly when a product
is perishable, stable and secure business relationships with trusted customers are essential.
The interprofessional consortia also often act as mediators to resolve commercial disputes
between members through an arbitration system. In this way, the disputing parties avoid
the economic costs of having to go to a civil court (Barjolle et al. 2005; Barjolle and
Chappuis 2000).

The important role that an interprofessional consortium may play in coordinating transactions
between the different links of the production chain is evident in the case of the cured ham
from the Spanish town of Teruel, which has a geographical indication. There was a time when
the market demand for ham was very high, but pig farmers were reluctant to increase pro-
duction, as they were afraid of, firstly, the high costs of breeding and, secondly, possible
fluctuations in income and greater dependence on the slaughterhouses and/or ham producers.
In fact, the pigs which are needed to produce the typical foodstuff have such specific
characteristics that the chances of selling the animals in other markets or through other
channels are severely limited. The consortium, together with the regional government,
intervened to mediate between the stakeholders and to improve information flows between
the different levels of the production chain. In addition, as a means of stabilizing the supply
of pork, a model contract was prepared which could be used by livestock farmers and
slaughterhouses in their commercial relationships. The contract included minimum purchase
price, product quantities and delivery dates (Chappuis and Sans 2000).

39
adding value to traditional products of regional origin

B.  Product quality, improvement and monitoring

The consortium not only watches over the specifications but also aims to manage and continu-
ously improve product characteristics. Although the specifications reflect the production require-
ments, these are not static and, if necessary, must be adapted and improved. Consortia,
therefore, are often involved in identifying the most suitable production technologies and
processes for refining the specifics of the final product for sale; often based on the results of
previous market research. Some alliances go further, by developing R&D activities aimed at
optimizing quality and reducing production costs. Some consortia also offer consultancy
services or training courses to their members, with the ultimate aim of improving the attributes
of the final product. In addition, some groups set up pilot technical centres to provide indus-
trial services (Barjolle et al. 2005; Barjolle and Chappuis 2000; Chappuis and Sans 2000).

To ensure maximum quality, professional consortia are often involved in managing the
properties of raw materials that members buy from external providers. On the other hand,
interprofessional consortia often coordinate, and mediate in negotiations between the various
links of the production chain so that producers and/or processors carry out their activity in
accordance with the quality standards specified by their respective direct clients, who form
part of the alliance.

In this context, identifying, measuring and properly rewarding the contributions of the various
operators to the creation of overall value is an essential task. The interprofessional consortia
often implement classification and quality-based payment systems to facilitate transactions
between different levels of the production chain. The prices of raw materials and/or processed
products that are marketed within the group are negotiated and are collectively fixed in
advance, on the basis of certain objective characteristics that determine their quality. The
price an operator receives for a given batch of its product varies and depends each time on
the extent to which that product meets certain preset standards. In addition to providing
transparency in business activities, the classification system also guarantees all members of
the consortium—whether customers or suppliers—a fair payment procedure, thus avoiding
any conflicts. Moreover, through the classification system economic incentives are created to
improve the properties of the product further (Barjolle et al. 2005).

One should also note the important role consortia play in the quality control and certification
process. On the one hand, using a team of their own supervisors, the groups often perform,
all or some of the inspections and checks necessary for obtaining the final seal of conformity;
on the other, the consortia often interact with the external certifying body, should there be
one. Given that the collective certification is usually the most beneficial financial option, the
groups often manage and centralise payment of external monitoring costs for all their
members and are involved in administrative procedures related to certification. For example,
in exchange for the corresponding fees, consortia often support and help their members to
prepare and compile the documents required for ensuring traceability, and later present them
directly to the external institution. This not only streamlines procedures, but also cuts down
on certification costs by reducing the involvement of the external entity (Belletti et al. 2007;
Couillerot et al. 2009).

Moreover, consortia can also use their corporate power to negotiate better certification rates
with the inspecting institution and to agree internally or externally a cost structure that is
better suited to the needs of economically weaker members. This has been the case with the
Italian extra virgin olive oil with the geographical indication “Toscano”. The smaller bottling
companies could not participate in the project, as costs of independent certification were too

40
 a guide to creating an origin consortium

high. The interprofessional consortium intervened: firstly, it managed to negotiate a reduction

in the fixed costs of the external monitoring activity and, secondly, it established an internal
system of redistribution of certification costs. The consortium, using the fees collected from
all member bottlers, began to subsidize the variable costs of inspection for these small busi-
nesses. The consortia can therefore coordinate and influence the distribution of certification
costs, both horizontally and vertically, appropriately managing the contributions paid by the
members (Belletti et al. 2007).

C.  Business and marketing strategy

Origin consortia are responsible for implementing the strategic decisions taken by their
members with regard to the marketing of the typical food or good, and for managing the
marketing mix appropriate for that purpose. The variables product, place, price and
promotion represent the operational tools used to achieve the objectives set by the members.
The consortium optimizes the product’s tangible and intangible attributes, each year sets a
recommended retail price for the product based on costs and desired market positioning and
selects target markets. It also decides the most appropriate distribution channels to reach
end-customers and develops and promotes the mark or, where applicable, the geographical
indication, through various activities. The considerable economies of scale that arise in a
consortium in terms of finance and know-how, reduce the promotion costs and allow the
implementation of ambitious marketing strategies which the members could never cover on
their own.

The preparation of communication tools, participation in trade fairs, launch of advertising

campaigns in different media, organization of events and exhibitions around the product, are
all examples of the many activities that a consortium can develop. In any case, it is the
members themselves who decide to what extent they want to standardize the marketing strat-
egy for the traditional product of regional origin, common to all members. Consequently, it
is they who set the boundaries in which the promotional work of the consortium should be
developed. The consortium’s only function is to facilitate and support the product marketing
of the different operators, without undermining the individual brands of each of them.

D.  Management of production volumes

In many consortia, agreements are reached between the economic operators to control
production volumes. The aim is to prevent fluctuations in supply and hence fluctuations in
product value which would make it impossible to maintain a position in a high market
segment. In fact, a sudden reduction in the price of the final product encourages stakeholders
in the value chain to produce substandard products, thus endangering the long-term
reputation of the label or geographical indication. Although it is important to control volumes
by introducing production quotas for the members, this is not always easy in practice, since
such procedures might violate the antitrust laws of various countries (Chappuis and Sans
2000; Roep et al. 2006). However, when the quantity is controlled, with state approval, as
in the case of the French Comté cheese with geographical indication, volume control
offers unquestionable advantages. The interprofessional organization of Comté restricts the
production of the cheese by selling a limited number of casein labels to the various operators
involved, without which it is legally impossible to market the product. Each year the number
of labels increases according to the expected demand for the cheese. For the consortium, the

41
adding value to traditional products of regional origin

sale of these compulsory labels is not only a means of controlling production volumes, but
also a way to pay for other activities: 95 per cent of its revenue is derived from this source
(Bowen 2007).

However, it is not only the state authorities who are sometimes opposed to production level
control practices. Dissenting voices may also arise within the consortium, as setting
production quotas means not just controlling what and how members produce, but it also
affects and jeopardizes their future decisions, compromising their freedom of action. The
consortium must therefore find ways to reconcile and unite conflicting interests and to bring
all stakeholders together around the central strategy of the collective organization. In the case
of the Italian professional consortium of San Daniele ham, the potential problem was
solved by relaxing quotas for export companies in the group, and by allocating larger
quotas to member processors with higher than average supply costs (Clara 1999; Barjolle and
Chappuis 2000).

E.  Fair distribution of profits among operators

Some interprofessional consortia contribute to a fairer distribution of profits derived from the
final product among the different links of the production chain. There are various ways of
achieving this. Firstly, collective organizations can collect and disseminate reliable information
about prevailing prices in the domestic or international markets. Primary producers, in
particular, often lack information about the amount they can charge for their raw materials
or the final price paid by the end-customer. By countering this lack of reliable data, the
consortia can help operators in their sales decisions and facilitate profitable transactions for
them (Barjolle et al. 2007; Barjolle et al. 2005; Reviron et al. 2004).

A case in point is the National Federation of Coffee Growers of Colombia (FNC, acronym
in Spanish), which holds the rights to “Colombian Coffee”, the first non-EU geographical
indication to have protection in the EU. Although the FNC operates as a cooperative rather
than a consortium, it is pertinent here to highlight its role as an information channel for its
members. The Federation sets the purchase price of coffee according to share prices on the
New York Stock Exchange. Primary producers can learn about the latest international market
returns and freely choose whether, based on current prices, they would rather sell the raw
material to the collective organization or market their products directly to independent traders
(Schüßler 2009; El Benni and Reviron 2009).

There is also another way in which the consortium may be involved in profit distribution.
The interprofessional organization can arrange negotiations between the various levels of
the production chain in order to reach binding agreements on prices that will be applied in
commercial activities between member operators. The partial payments should be in direct
relation to the final value of the finished product in the market; increases in the final price
of the product are automatically reflected in increased prices received by the various
operators. The Comté consortium once again sets a positive example in this regard, where
partial prices and the final price of cheese are directly linked by a system of calculation used
within the collective organization, which fairly acknowledges the contributions of the various
links in the production chain. When the average price of Comté cheese increases, the
primary milk producers and processors benefit almost equally (Bowen 2007). An equitable
redistribution of profits means that all operators feel committed to the common project and
work to improve the product and expand sales.

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 a guide to creating an origin consortium

F.  Control of opportunism

The consortium must ensure that all members are subject to the self-imposed rules and
specifications, through social control mechanisms, written regulations and disciplinary mea-
sures, including exclusion from the group. Members should be prevented from adopting
individualistic strategies in terms of product quality, quantity and marketing that could jeop-
ardize the product’s reputation and positioning in the market. However, this is not always an
easy task, as the consortium basically lacks the legal authority to impose or enforce all its
decisions. For example, the consortium lacks the means to exert the pressure needed to ensure
that all members respect the recommended retail price, established collectively for product
sales. However, as evidenced in the case of the Melinda consortium (see p. 46), it is possible
to compensate for the lack of authority through the use of creative mechanisms.

In any case, it should be noted that the organization’s capacity to manage and monitor should
not come from its hierarchical superiority over members, but from its ability to collaborate
with them. The consortia are not set up to be auditing or governing bodies, but as alliances
to coordinate common interests. As legally independent associations consortia must seek to
achieve legitimacy and a broad consensus on a joint strategy in order to operate (Clara 1999).

It is certain that in EU countries, and others with similar legal systems, consortia have
significant legal powers in relation to the economic operators, once an institutionalized
geographical indication has been obtained. However, precisely because of this, some consortia
“have become more like instruments of monitoring and inspection of companies and
production processes than organizations to help companies to differentiate, market and target
themselves effectively towards consumers” (Cambra 2009: 345; own translation). Combating
opportunism, unlawful competition and fraudulent use of the geographical indication is essen-
tial work which the consortium must develop, but should not become its primary function.

3.6.  Promoting a traditional product

of regional origin
The promotion of the common product is one of the
essential functions of an origin consortium, as already
mentioned. If the group fails in its marketing policy,
if it focuses too much on the product and neglects
the market, it will be difficult for the common project
to achieve its objectives. In fact, clearly visible good
quality of the marketed item is essential but not suf-
ficient. “Pride of the product and loyalty to the tradi-
tional production techniques may generate highly
valuable product qualities, but it is definitely not a
guarantee for a sound and successful sales strategy” (Albisu, L.M. quoted in Rangnekar 2004:
33). A well-designed and implemented marketing and commercialization strategy can be such
a determining factor that it can sometimes even compensate for the lack of specificity of a
good or foodstuff. For example, the British Jersey Royal potato, which has a geographical
indication, despite the fact that it does not have too differentiated attributes, is selling well
in the markets due to good business management and optimal coordination with wholesalers
and retailers (Wilson et al. 2000; Barjolle and Sylvander 1999).

43
adding value to traditional products of regional origin

The details of the promotion policy and the specific activities to be developed by an origin
consortium should be designed and planned according to product characteristics, financial,
human and time resources available, and members’ priorities, etc. However, since all traditional
products of regional origin share certain features, it is important to highlight some points
that must be taken into account when designing the marketing mix.

The success of an origin consortium is based largely on the coherence and balance between
two vectors: 1) product differentiation and effectiveness of business communication; 2) the
unity of the members and the consistency of the organizational structure. Underpinning these
two axes must be the primary objective to be met, which requires a progressive and well-
thought-out approach (Roep et al. 2006; Wiskerke 2007). The strategy of hurriedly registering
any type of mark and/or obtaining a quick quality certification for the product in order to
launch it as soon as possible onto the market can mean having to sacrifice the level of
differentiation and control of distribution and marketing. Before starting to market the
“reinvented” product on a large scale it is therefore essential that the common project has
achieved high levels of internal consistency and that all members are aligned with common,
long-term goals (Vuylsteke et al. 2008; Roep et al. 2006; Arfini et al. 2008).

The selection of distribution channels should not be made hastily or circumstantially, but
should be the result of careful analysis and solid relationships. Experience shows that
initiatives tend to perform better economically if already in the early stages they manage to
build alliances or even incorporate potential wholesalers or retailers into the consortium, who
share not only a concern for quality but also a vision of the product rooted in the territory
(Vuylsteke et al. 2008; Roep et al. 2006).

As regards distribution, the consortium must also decide at some stage whether or not direct
sales, outside the distribution channels specifically selected by the group, can be permitted
to members. Considering the attributes of traditional products of regional origin, it is often
advisable that the marketing of these products is not carried out solely through conventional
wholesalers and retailers, such as supermarket chains and gourmet shops. Especially in tourist
areas, shorter distribution channels make it possible to establish a link between the consumer
and the product’s region of origin and can enhance its image as a foodstuff or, should it be
the case, a typical and authentic good. Obviously, in the case of direct sales from farms and
independent marketing at craft or fresh produce markets, the consortium should monitor
members’ compliance with the collective rules on quality and price. In this sense, individual
sales should first and foremost be a component of the marketing mix rather than a
concession to the joint promotional and commercial strategy (Van de Kop and Sautier in:
Van de Kop et al. 2006; Barjolle et al. 2005).

To achieve good product positioning and high visibility of the shared mark or common
identifying seal, a joint and coordinated communication effort between the consortium and
the various member companies is essential. All stakeholders must be committed to the
promotion strategy, as they all contribute, through their actions, to the product’s reputation.
But this should at no point imply that the various operators have to renounce marketing
activities focused on promoting their own individual brands. In fact, when the collective label
gains prominence and supersedes the importance of individual brands, there is a danger that
companies with recognized brands will lose interest in the common project. This type of
development could erode the credibility of the shared mark which claims, in some way, to
be representative of a typical product from a specific geographical area.

Furthermore, the consortium’s communication strategy should not be limited to publicizing

the collective label but, as far as possible, aim to provide information on the various qualities

44
 a guide to creating an origin consortium

of the products included under the same shared distinctive mark. In the case of wine, for
example, it is not in the interest of the various winegrowers that customers only recognize
the shared label or the geographical indication, if there is one, and fail to perceive the
vast difference between a young and a premium vintage wine (Cambra Fierro y Villafuerte
Martín 2009).

Many origin consortia do not focus on giving visibility to a shared trademark name, but
develop a communication strategy aimed at obtaining recognition of the product as a
geographical indication. In countries where there is no legal framework to protect such
intellectual property rights, the consortia have to champion their project as a common interest
cause, in order to exert the political pressure necessary for establishing relevant legal
conditions. In any event, the marketing strategy should not be overly focused on registering
a geographical indication, as official certification alone does not automatically result in a
significant increase in demand. It is not for the geographical indication itself that the consumer
is willing to pay a premium, but for the promise of quality that is associated with legal
protection. However, this assumes that the customer understands the concept of geographical
indication and what it means, something which is not always the case (El Benni and Reviron
2009).

In fact, even in the EU, where geographical indications have a comparatively long legal
tradition, many consumers are still unaware of the distinctive marks of protected products or
do not know exactly what they imply (Gerz and Dupont in: Van de Kop et al. 2006; Cambra
Fierro and Villafuerte Martín 2009). On the other hand, particularly in markets such as
Europe, where there has been a gradual proliferation of food and beverages with geographical
indication, the certification helps, but is not enough to make a product stand out. In fact,
even among items with the distinctive mark, there is a significant concentration of market
shares. In 2004, in Italy, the ten top foods accounted for 82 per cent of domestic and foreign
sales of products with geographical indication, whereas the other 130 Italian marks certified
on the basis of origin, only accounted for the remaining 18 per cent. In cases such as that
of Parma Ham or Parmigiano Reggiano, consumers know and recognize the foodstuffs more
as reputable brands than products with geographical indication (Marette 2009).

The greater the degree of ignorance of the concept of geographical indications among end-
customers, the more important it is that management of the consortium is targeted towards
the market; to attract sophisticated consumers it is necessary to implement an elaborate
marketing strategy that does not build on the imagined prodigious capacity of certificates of
origin.

But while the registration of a geographical indication does not in itself guarantee sales
success, the legal battle for recognition of a(n) (institutionalized) geographical indication, can
significantly increase a product’s visibility and hence demand for that product. Even before
obtaining the coveted mark, the conflicts that often arise between different stakeholders
because of legal recognition (see Section 3.8) sometimes make the local headlines, increase
the level of knowledge about the product in dispute and, consequently, its sales figures (Perret
and Devautour in: Gerz et al. 2008). The certification or institutionalization process should,
therefore, not necessarily be seen and managed only as a mere formality for protecting
intellectual rights, but as a part of a broader communication campaign aimed at increasing
product popularity and recognition.

It must also be remembered that geographical indications tend to have greater impact on
purchasing decisions when relative geographic proximity is given; that is, at a national level.

45
adding value to traditional products of regional origin

In international export markets the consumer is usually swayed more by the fame of a
particular brand or by the image of the country a particular product comes from (Cambra
Fierro and Villafuerte Martín 2009). Moreover, at a strictly local level, neither is the buying
decision influenced by the geographical indication; customers are aware of the qualities of
the products in their area and buy them on this basis. In the case of the Italian olive oil
“Toscano” with a geographical indication, the name linked to the origin is not a decisive
factor for traditional local consumers as they have first-hand knowledge of the typical product
and, above all, trust its quality. Outside Tuscany, however, the “Toscano” label helps attract
and retain geographically and culturally distant Italian consumers (Rangnekar 2004).

It is important that the consortium adapts its communication and distribution strategy to the
different territorial areas of operation. Depending on the market where the product batches
are being distributed, one or another of the tangible or intangible product attributes will
acquire greater or lesser importance.

BOX 7.  Italy:The “Melinda” apple from Val di Non

“Melinda” is a well-known brand of apple, owned by an Italian consortium of the same

name. The history of the consortium illustrates how an appropriate associative structure
can be crucial to the success of a traditional product of regional origin in the markets. A
long time before the consortium was established, the apples from the Italian geographic
area of Val di Non were already quite famous. More than 5,000 small growers in the area
were all using similar production techniques and during the 1950s and 1960s got involved
in various local agricultural cooperatives which were responsible for preparing, packing and
selling the apples. The idea of further joining forces under the umbrella of an alliance of
cooperatives arose during the late 1980s. At that time in Italy, over three times as many
apples allegedly from Val di Non were sold than were actually produced in the geographical
area. Furthermore, the competition in a fresh-produce market, marked more and more
each day by the globalization process, became increasingly fierce.Thus, the managers of the
17 apple cooperatives existing at that time decided to establish the Melinda consortium
which, over the years, took on more and more functions.The alliance’s development would
always be marked by a leadership that was democratic, flexible and open to dialogue,
composed of between two and six of these managers, who demonstrated excellent skill in
easing tension and dispelling mistrust.
Members quickly agreed to work together under the collective brand name of “Melinda—
Val di Non”, which would serve both as a mark of origin and of quality. If the apples sold
by the cooperatives were good before, they now had to be even better. In fact, the
“Melinda”* label was reserved only for apples produced according to the requirements of
the trademark’s rules of use, which included “integrated production” standards to ensure
respect for natural biological cycles. Growers who failed the inspections of the cooperati-
ves were fined and their products not allowed to be marketed during that season. In this
context, the role played by the various specialized public entities in providing technical and
training support to member growers to facilitate their adaptation to new quality standards
proved to be essential.

*
Although the labelling states “Melinda—Val di Non”, the apples are known mainly under the name “Melinda”.

46
 a guide to creating an origin consortium

In the early 1990s, the responsibilities of the consortium were still relatively limited. It was
only in charge of promoting the “Melinda” brand, buying the packing material and selling
the product through three secondary distribution channels which represented less
than 30 per cent of production: export, large-scale Italian distribution and industry.
The remaining sales were conducted completely independently by the various cooperati-
ves which otherwise had total freedom to set their own prices. The managers of the
cooperatives at that time fulfilled a dual professional role; they continued to work for
their respective groups and also occupied in a collegiate manner the various senior
management and operational control positions within the consortium. A rotation and
group restructuring system prevented the formation of interest factions among represen-
tatives of the various local cooperatives.
The cooperation strategy was successful and “Melinda” apples were soon welcomed in the
market. However, the division of responsibilities between the two levels of associative
integration soon showed its lack of consistency. The various cooperatives continued to
maintain price competition between themselves, although selling apples of the same quality
and, what is more, under the same designation. This behaviour could, of course, affect the
reputation of the collective “Melinda” mark. For this reason, in the mid 1990s the consor-
tium decided to introduce a single reference price for all apples marketed directly by the
cooperatives. In addition, a quality-based classification and payment system was introduced,
and was thereafter maintained to provide an incentive for excellence. However, through
the system, the best were only moderately rewarded, as all growers contributed equally to
financing the consortium and to maintaining the “Melinda” name at a high level in the
market. For the reference price itself, the consortium also established an adjusted incentive
mechanism based on the principle of individual losses and collective gains. The coopera­
tives were still not obliged to apply the price recommended by the alliance, but had moti-
ves to do so. If they sold their product below the established price, they would not receive
any compensation; but if they sold above the price, they would have to return the
difference to the consortium which would later redistribute the total accumulated among
the various cooperatives depending on the quality of product they had sold.
The single price mechanism served to increase overall profits, but even so, a few years later,
the senior management of the consortium decided the time had come to make further
advances in the centralization process. The existing structure prevented them from taking
full advantage of economies of scale and specialization; it also prevented them from
eradicating opportunistic behaviour and price competition. The organizational change to
the “Melinda system” was also boosted by the generous financial assistance which the
European Union had started offering large producers’ alliances that integrated the
management of supply and logistics into one single, stable structure. The first step in this
direction was the centralization of all marketing activity, which henceforth would be the
sole responsibility of the consortium.
The cooperatives continued to maintain their financial and legal autonomy and responsibi-
lity for monitoring the quality and packing of the apples, but they could not intervene any
longer in the marketing mix. With this innovation, the dual role in which the cooperative
managers previously found themselves in was further accentuated; and it was clear that this
organizational situation was not sustainable. Shortly afterwards, they advanced further by
also centralizing certain aspects of logistics. The managers of the cooperatives became
exclusive employees of the consortium and occupied various operational positions of

47
adding value to traditional products of regional origin

responsibility within it. The supervision of quality was now in the hands of the consortium.
It was finally possible to homogenize completely the practices of monitoring and inspecting
the apples. In any event, during this period there were hardly any violations of the rules of
use. Growers had adapted to the demands of integrated production. Moreover, in a rural
environment such as Val di Non, where the professional image and social reputation of a
grower were highly intertwined, community pressure helped avoid cases of intentional
fraud.
In the late 1990s, the consortium operated increasingly like a company, while the functions
of the cooperatives had become very limited. However, in all the consortium’s decision-
making processes, the associative democracy component was as present as ever, since it
was the representatives of the various cooperatives who governed its management bodies.
Moreover, to give a greater say to the rank and file, a large, extra-statutory, consultative
assembly was established that included around 5 per cent of the fruit growers. It was
mainly the ability of the leaders of the “Melinda” project to maintain an ongoing dialogue
with the over 5,000 small farmers, and to involve them in key decision-making, that enabled
the progressive and successful development of the consortium. It was also crucial that they
were able to smooth over old micro-local rivalries and foster the birth of a new territorial
identity among the growers, who belonged to geographically close, but nevertheless
different, communities and cooperatives. While under the umbrella of “Melinda—Val di
Non” new production, technical, marketing and organizational techniques were being
developed, a new, broader, territorial identity linked to the Val di Non was emerging from
the grass roots. The pillars of the “Melinda” project were well established in their local
environment; the processes of modernization and innovation did not interfere with the
social reality of Val di Non, traditionally marked by small, family production structures.
The historical and territorial roots of the “Val di Non” apples were officially confirmed
when they received geographical indication status in 2003, thanks to the efforts of the
consortium. The recognition of the uniqueness of the product was a source of pride, but
did not essentially change the consortium’s advertising strategy, which continued to give
priority to promoting the collective mark. In fact, thanks to the significant communication
effort carried out over the years, “Melinda” had become famous in the markets and brand
recall among consumers was high.
In recent years, the “Melinda” project has just continued to grow. The consortium has
assumed more responsibilities and has further expanded its scope of activities.Today, apples
from the Val de Non are exported to 27 countries. Moreover, in addition to the traditional
seeded fruit, apple-based products are also now marketed under the “Melinda”
trademark.

Main source: Parri et al. 2002

Other sources: Arfini et al. 2008; Martini 2000; WIPO 2004; www.melinda.it

48
 a guide to creating an origin consortium

3.7.  Expanding the origin consortium

Once the consortium members have reached a cer-
tain level of turnover from the shared product, they
must decide whether or not to expand their opera-
tions and increase the volume of sales; something
that inevitably requires the admittance of new mem-
bers. The number of associates in a consortium does
not, in theory, determine the degree of consistency;
both large organizations and small ones can be better
or worse managed and structured. Generally, a small
consortium does not require that high levels of com-
mitment and coordination efforts from its members to be able to function well and is more
cost-efficient. However, the market reach it can achieve is obviously also more modest (Roep
et al. 2006; Barjolle and Sylvander 1999).

In any case, extending the consortium should not be an end in itself and, above all, should
not endanger the pillars which have to sustain the collective organization: transparency, mutual
trust and equality among members, the alignment of shared interests and objectives, and
equitable distribution of costs, benefits and decision-making power (Roep et al. 2006). In this
context, it should be borne in mind that incorporating more members into a consortium can
raise tensions. The new associates are often attracted primarily by the economic benefits they
expect to receive and do not necessarily share the vision and the original guiding principles
that united the founding members. These, in turn, are suspicious of the newcomers benefiting
from the road already paved by others, without having to take any risks (Barjolle et al. 2005;
Reviron et al. 2009). The decision of whether or not to admit new economic operators can
be taken more or less freely according to the protection system chosen for the product. If
the product is protected under a collective mark, deciding on membership, and hence the
number of different users, does not usually cause any major problems in practice. However,
this is not necessarily the case with certification marks and even less so with recognized
geographical indications (Barjolle et al. 2005).

According to the legal frameworks of a large number of states, a geographical indication may
be used by all economic operators located in the geographical area in question who respect
the specifications and/or other relevant conditions. Not all national laws provide that the
stakeholders involved have necessarily to belong to the collective organization or consortium
to be able to use the label. However, this does not prevent many operators freely choosing
to join the official group that oversees the protection of the geographical indication because,
in the eyes of many producers, joining the collective organization brings with it significant
benefits such as simplifying certification procedures (Raynaud et al. 2002; Belletti et al. 2007).
While it is true that to regulate membership and to balance product supply and demand the
consortia usually establish waiting lists, it is equally true that the registration of a geographical
indication could result in a relative loss of control over the number of members.

3.8.  Criteria for applying for a geographical indication

Depending on the legal framework in the country in which an origin consortium operates, it
will be more or less simple, feasible and affordable to obtain recognition and protection of a
geographical indication for a given product. In some countries, obtaining this type of label

49
adding value to traditional products of regional origin

can be a matter of carrying out relatively few procedures, whereas in others the process can
be very complex and require great investment in time and money, especially when the national
laws still do not consider geographical indications as a legal concept. Moreover, the require-
ments and obligations that producers have to meet in order to obtain recognition, for example
with regard to registration costs or quality certification procedures, also vary from country to
country. Therefore, it is impossible to establish criteria that are always valid and can help
with the decision as to whether or not to seek the protection of a geographical indication.
However, the broad experience of EU countries in this area shows that (institutionalized)
geographical indications are not necessarily a panacea, as will be shown below.

As a start, not all types of products possess the characteristics necessary to enable them to
extract the maximum benefit from a geographical indication. Products which due to their
nature are best sold through short distribution channels to consumers in the area and to
tourists, and for various reasons cannot be produced in large quantities and are already suf-
ficiently well known to be able to benefit from significant premiums in their target market,
do not necessarily improve their sales or market position by having a geographical indication;
or at least not to such an extent as to cover the additional direct or indirect costs entailed
with obligatory quality control and certification. This fact is not always taken into account,
however; a misinformed desire to register products under the legal modality in question has
meant that even in the EU there are numerous cases of officially recognized geographical
indications which are hardly ever used commercially due to a lack of interest among potential
users (Carbone 2003; Marescotti 2003).

Moreover, the traditional products of regional origin which are sold mainly at local level,
do not necessarily face greater problems associated with fraudulent use of the origin-based
designation and, sometimes the concern is justified that recognition of the geographical
indication may have an opposite effect to that desired. In fact, although official protection
helps effectively to combat abuse of the designation, sometimes the renown and the high
prices achieved by the product due to the geographical indication in the market, encourages
fraud (Marescotti 2003; Tregear 2004; Gerz and Fournier in: Van de Kop et al. 2006).

Furthermore, when a consortium decides to protect the product’s origin-based designation,

together with the relevant production standards, as a geographical indication, the terms
of the previously developed specifications can become the subject of heated contention.
Losing the battle over technical codifying is not a secondary issue for those concerned, since
operators whose production practices are not in line with the specifications will not be allowed
to use the geographical indication. Depending on the specific designation under which it is
decided to protect the product, for some, registration of the institutionalized geographical
indication may mean that they may all of a sudden lose the right to market their product
under the traditional name they always have used. In addition, opportunistic producers and
processors may appear, afraid of being left out of what promises to be a lucrative business.
Consequently, they will fight to have the set of specifications establish conditions in their
favour.

However, quite often conflicts not only occur among the economic operators directly involved;
sometimes public and private institutions also intervene, as they see the geographical
indication as a good means of boosting the local economy. Nevertheless, regional and munici-
pal administrations and chambers of commerce are not always good partners for an origin
consortium. Experience shows that these institutions encourage a broad and imprecise
definition of the specifications in order to include as many potential operators as possible;
which may have somewhat unfortunate consequences, at least from a commercial standpoint.

50
 a guide to creating an origin consortium

The product may lose its specificity, its distinct character, its typical qualities and, ultimately,
the primary source of its added value (Tregear 2004; Belletti et al. 2002).

Something similar is true for the demarcation of territory. The geographic delimitation of the
area in which a product can be legally produced under the protected name becomes a crucial
issue when deciding to apply for official recognition. Being “inside” or “outside” the delimited
area has important implications for economic operators, and it is not always easy to establish
the lines of separation: some products are closely tied to a particular ecosystem and only a
few producers know about and apply appropriate production techniques, but in many cases,
the ecological conditions or know-how for producing the product are widely disseminated
(Reviron et al. 2009). It is very often the case that pressure from public and private stake-
holders obliges that as wide a territorial demarcation as possible is established, often much
larger than the traditional area of production. For operators in the traditional production
areas, this means having to face greater domestic competition. It also means that other
economic stakeholders are fully authorized to use the recognized designation associated with
a geographical area in which they do not operate. For example, one of many reasons why
Italian farmers in the Tuscan village of Lari have so far not wanted to protect their famous
cherries through a geographical indication has been precisely the fear of having to expand
the official production area, thus allowing producers in other villages to suddenly be able to
legitimately offer “Cherries of Lari”. The alternative of changing the already well-known name
to “Pisa Mountain Cherries” has also been a concern, since this would mean renouncing the
historical reputation of the product and losing the leadership of the initiative (Marescotti
2003; Tregear 2004).

Furthermore, establishing a wide legal area of production can involve the internal redistri­
bution of income received due to the origin of the product. This phenomenon has been
observed in the case of Italian olive oil from the vast region of Tuscany. While the famous
production areas of old have generally been adversely affected by the recognition of the
geographical indication, it has had very positive effects for the more dynamic companies,
located in traditionally lesser-known production areas, who have been able to penetrate more
distant markets. This type of development obviously does not have to be negative, but it
must be taken into account and integrated from the beginning into the cost and benefit
calculations (Belletti et al. 2002).

Another factor not to be overlooked is that, once the geographical indication has been obtained,
the number of producers in the area may increase. Many industrial investors from other areas
may be attracted by higher profit margins they expect to achieve. Consequently, the number
of individual brands marketed under the same geographical indication increases and, as a
result, domestic competition between operators also rises. A profusion of industrial initiatives
can sometimes pose a serious threat to traditional producers in the area. “Turning to
‘trajectories’ of [geographical indications], the institutionalization may help external powerful
actors (mass distribution, processing firms, traders) to extract resources and added value from
the area of origin, menacing rather than fostering local development.” (Marescotti 2003: 4;
Cambra Fierro and Villafuerte Martín 2009; Tregear 2004; Acampora and Fonte 2007;
Carbone 2003).

Certainly, not all local operators always benefit from the geographical indication. Often those
who end up being excluded are those stakeholders with less social, economic and technologi-
cal capital; they often lack the capacity to implement the specifications or cannot afford the
costs of compulsory certification. These stakeholders, marginalized by not being allowed to
sell their product under the protected name any longer, not only cannot charge a premium

51
adding value to traditional products of regional origin

for the geographical indication, but sometimes also face a reduction in the value of their
products (Vuylsteke et al. 2003; Sautier and Van de Kop in: Van de Kop et al. 2006; Marescotti
2003; Acampora and Fonte 2007).

One danger in this context may be the lack of information about the existing legal framework
among operators not directly involved in the initiative to obtain the institutionalized geographi-
cal indication. In Bosnia and Herzegovina, for example, the future legal protection of the
traditional cheese “Livanjski” under the terms desired by an association of small farm cheese
processors could lead to serious, unexpected problems for small-sized companies that produce
and successfully market an industrial homonymous product. Many of them are not aware of
the consequences registration of an institutionalized geographical indication entails for those
who do not respect the specifications. They do not know that they will no longer be able to
sell the product as “Livanjski cheese” or “Livanjski-style cheese” and, conversely, think that
they will only be prevented from displaying the geographical indication. The fact that no
conflicts have yet arisen among the various groups of operators over the content of the
production rules attached to the registration application is due mainly to this lack of informa-
tion. It is also worth noting that future exclusion of these companies from using the geo-
graphical indication would not only have adverse effects on the companies themselves but
also, by extension, on the entire local economy (Bernardoni et al. 2008).

In summary, although a geographical indication can be an excellent tool for increasing the
competitiveness of local operators, this is certainly not always the case, and never for every-
body involved; there are both winners and losers. Members of an origin consortium should
therefore take into account the advantages and disadvantages of registration and should value
according to their priorities whether the expected benefits of obtaining the origin-based mark
outweigh the sacrifices that would have to be made. Many of the problems that arise when
deciding to opt for a geographical indication do not usually occur if a consortium is limited
to working with a collective mark or certification mark; but it is also true that the market
potential and scope of legal protection under a(n) (institutionalized) geographical indication
is much greater.

3.9.  What kind of external support to seek

As already mentioned before, in developing and transition countries, the majority of the ini-
tiatives for creating origin consortia are prompted not so much by the operators concerned
as by public institutions or NGOs. It is difficult for many of these projects to come to frui-
tion without government support and without the corresponding external promoter of the
grouping process. However, the European experience has also shown the importance for a
large majority of the collective organizations of having external support, whether public or
private. The reinvention of a traditional product of regional origin involves large investments
of time and money, which often cannot be met by economic operators independently.

Given that, especially at the beginning of an initiative of this kind, commercial banks are
often reluctant to provide the necessary loans, financial support from other external bodies
is vital if producers are to be able to afford the technical, organizational and structural
innovations required. No less important is technical assistance and legal support in defining
the criteria and the development of specifications standards. Similarly, the subsequent imple-
mentation of the specifications can entail certain difficulties and in this area too external
bodies can help operators by providing technical training or consultancy services. In addition,

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 a guide to creating an origin consortium

any type of support that involves reducing certification expenditures for the stakeholders
concerned may be of particular importance since for many of them inspection costs represent
an insurmountable barrier. Subsidised public certification schemes, for example, may be a
valid means in this context (Wiskerke 2007; Roep et al. 2006; Boutonnet and Damary in:
Gerz et al. 2008).

Furthermore, it should be noted that many initiatives related to typical food products depend
largely on the good will of public institutions to grant legal exemptions. Some traditional
products of regional origin owe their organoleptic characteristics to production practices and
traditional processes that may conflict with food safety legislation. If public authorities do not
show sufficient flexibility, the project may fail while still in its infancy (Wiskerke 2007; Roep
et al. 2006; FAO 2008).

Even when the project is up and running, external assistance, whether public or private, can
make a difference. Subsidies for developing communication tools or for launching marketing
campaigns can be just as important as funding for the salary of an expert who manages the
group and promotes the successful marketing of the product. In marketing matters, the public
legitimation of the initiative can also be of paramount importance; and obtaining it is not
always difficult, given the important role traditional products of regional origin can play in
boosting local economic development (Wiskerke 2007; Roep et al. 2006).

Nevertheless, not all typical products are equally suitable for creating links with other eco-
nomic sectors and for promoting local welfare. Consequently, not all products manage to
arouse the same interest among third party stakeholders or act as a unifying element for a
broad, integrated territorial development strategy. For a product to play a catalytic role in an
integrated territorial strategy, it should have a prominent symbolic and identity-shaping con-
tent for the entire local community, and not just for members of the production chain. The
product should be a cultural marker that serves to add value to the area as a whole and to
project the regional identity outwards. There must be close ties between the product, local
history and various aspects of community life. Additionally, the product must be associated
with the traditions of the place and its natural, scenic or artistic resources (Alcampora and
Fonte 2007; Tregear 2004; Belletti et al. 2002; Barjolle et al. 2007).

When the technical and financial resources or the know-how necessary to obtain and/or
produce the typical foodstuff or good are easily accessible to a large number of local stake-
holders, it is easier for the product to establish itself as an identity-shaping element and
promote social cohesion and a sense of belonging among residents. The latter factor also
applies to the geographical extent of the product’s area of origin; when it is limited, the roots
of the latter in the territory may be more intense and the unifying effect more pronounced.
Moreover, when the product or raw materials for processing it are clearly visible and
characterize the landscape of a locality, the development of an integrated territorial strategy
for a foodstuff or artisan good is much more feasible. In this sense, the traditional fruits
of regional origin hanging from beautiful trees can be very attractive to visitors and may
be optimal cultural markers. Moreover, these foods have another advantage; namely that the
resources needed to acquire and exploit fields of fruit trees are comparatively small.
Conversely, traditional pork sausage of regional origin, in principle, is far less suitable as a
catalyst for regional development. Indoor pig farms do not usually have high visibility and
production requires highly specialized equipment and expertise that only a few professionals
have (Tregear 2004; Belletti et al. 2002).

The integrated, territorial value-adding strategies unite broad economic, political, social and
scientific groups for the joint promotion of the area based on the typical product that

53
adding value to traditional products of regional origin

represents the cultural marker. This acts as the central axis on which regional development
is anchored in and forms the cornerstone for a broad basket of goods and services. The
reputation of the product is used to also add value to other typical products and the natural,
historic and artistic heritage of the area. In turn, reconstructing local identity and strengthen-
ing the local image of quality help to improve the marketing of the traditional product of
regional origin. Obviously, for this virtuous circle to be established the typical product needs
to be especially attractive to visitors and tourists and it must be sold within the territory
in question, either directly or through short distribution channels. Gastronomic tours, for
example, are a widespread means of promoting global value-adding to a territory based on
a traditional food or drink. Visitors can trace the typical product at the same time as enjoying
culinary pleasures, nature, cultural heritage and folklore. A wide circle of local stakeholders
are involved in these routes, which include operators in the product production chain, travel
agencies, museums, hotels and restaurants, craft producers, cultural associations, environmen-
tal associations, scientific institutions, etc. (Alcampora and Fonte 2007; Belletti et al. 2002).

The range of local and non-local stakeholders who may be potentially interested in participat-
ing in a local development strategy focused on a traditional product of regional origin
is extremely long and it would be futile to try to establish a definitive list. However, the
heterogeneous interests that coalesce around a cultural marker neither have to be compatible
nor have to converge. As mentioned in the previous chapter, the priorities of origin consortium
members can sometimes be diametrically opposed to the territorial value-adding plans of
other operators or public or private entities. While marketing the traditional product of
regional origin is the main concern of those in the production chain, for other stakeholders
it sometimes only represents a tool for setting in motion much broader dynamics of territorial
development. In fact, the actual marketing of the traditional product of regional origin may
matter less than its potential to act as a flagship for the area (Belletti et al. 2002; Tregear
2004).

Ultimately, members of the origin consortium should analyse, case by case, whether it would
be a good idea for them to include certain stakeholders in their project, depending on whether
they share the same goals and the same vision for territorial development. Establishing broad
partnerships can help cement the initiative and increase revenues, but it can also result in
the project losing its initial direction and ending up by serving the purposes of third parties
more than its own.

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 a guide to creating an origin consortium

BOX 8.  The Slow Food movement

When talking about the promotion of traditional agri-food products, Slow Food has
become an almost obligatory reference.The international movement, with headquarters in
Italy, was born in 1989 and since then has been dedicated to protecting the world’s
eno-gastronomic heritage. It currently has over 83,000 members in more than 120 coun-
tries who form part of one of the 800 local groups, generally known as “convivia”. For a
long time now, Slow Food has shaken off its earlier image as a mere bastion against the
cultural model of fast food and a platform for hedonists who uphold indulgence in tasty
delights. In fact, the work carried out by the movement goes much further than food or
wine tastings and eno-gastronomic tours. Slow Food organizes large events and runs the
“Salone del Gusto”, the world’s largest traditional and high-quality product fair which takes
place every two years in Turin (Italy). The movement is also behind the establishment
of the first European university of Gastronomic Sciences, which offers higher education
programmes that conform to Italian academic standards. The publishing arm of Slow
Food has numerous publications on the market related to culinary traditions, and some
gastronomic guides have become veritable best sellers.
The Slow Food Foundation for Biodiversity was created as a separate statutory and
economic entity within the movement, whose purpose is to support the conservation of
wild and domestic plant and animal species and also the preservation of typical local
products which are in danger of falling into oblivion. The Foundation has three main areas
of activity.
The Slow Food Award for the Defence of Biodiversity recognizes individuals and entities
who have contributed to the conservation of species that form the basis of the culinary
heritage of a country. On the other hand, the Ark of Taste project is mainly a database of
agri-food products of proven excellence that are in danger of disappearing for one reason
or another. A scientific committee is responsible for recovering and cataloguing traditional
products which merit special protection, and for collecting information about the products’
history, production techniques and their commercial potential. To date, more than 750
products from all over the world have been added to the Ark database. The enormous
success of the database of products threatened with “extinction”, led to the creation of
“presidia” which are an operative response to the challenges posed by the Ark of Taste.
Thanks to the 320 presidia across the world, Slow Food has, in some areas, become the
spearhead of promotion and value-adding to typical local products.
Encompassed within the presidium concept are a series of very different small-scale
projects intended to safeguard endangered food products. Slow Food supports artisan
producers in order to protect age-old production techniques, improve quality and, hence,
the possibilities of marketing traditional products and preserving the economic, cultural
and ecological heritage associated with them. Sometimes a project focuses on the last
depositary of know-how for the production of an already-forgotten typical product, but a
presidium is generally an organizational umbrella which encompasses one or several
groups of local producers who produce small amounts of the same foodstuff linked to a
specific territory. Slow Food assists its beneficiaries in many ways: it intervenes in grouping
processes, helps prepare a set of specifications, contributes to introducing improved
techniques and technologies, helps in the search for new distribution channels and
promotes the product among potential consumers. Although presidia emerged as cultural

55
adding value to traditional products of regional origin

initiatives, over time they have adopted a business and market logic whilst always remaining
true to the principles of tradition and authenticity. In fact, many food products covered by
the Foundation which were, initially, destined for self-consumption, have begun to be
marketed thanks to a presidium. In practice, developing new niches for the foods in danger
of disappearing often means contacting local restaurants or starting to sell the product
at fresh produce markets. However, Slow Food has been looking for more and more
innovative ways in this regard.
A few years ago the movement broke a taboo for the first time and intervened so that
some of their “presidium” products could break into the vast mass consumer market. It
was in Italy that the first agreement with a leading agri-food distribution chain allowed
previously forgotten regional foods to become known once again. The company promised
not only to display certain typical products on its shelves, but also to inform the end-cus-
tomer about the characteristics of the product and to offer tastings. Moreover, a clause in
the contract obliged the chain to respect the limitations of this type of products in terms
of production volumes and seasonality.
Slow Food Italy has recently invented a new promotional formula to add value to the
endangered products of regional origin and to protect them against unfair competition.
The “Slow Food Presidium” label name which was registered by the movement is aimed at
facilitating the marketing of typical products, and its use is reserved to the Italian presidia
that apply for it and comply with the conditions established by the mark owner.The artisan
producers must have established an association, consortium or cooperative, must respect
the specifications rules of the presidium in question and must submit themselves to the
movement’s monitoring procedures.
In general, the elements that characterize the work carried out by Slow Food are a
multidisciplinary approach, the search for non pre-defined solutions and the capacity to
adapt to diverse needs, different regional contexts and disparate cultures. The movement
does not operate alone and, in fact, usually collaborates with and receives support from
public institutions, private companies or other foundations. Moreover, the products
covered by Slow Food are often promoted in parallel and independently by other national
and international entities, such as in the case of Argan Oil from Morocco which, incidentally,
also received the support of UNIDO. The Slow Food movement, though not always the
only stakeholder interested in rescuing the last remnants of an ancient eno-gastronomical
culture of a given region, provides widely valued responses and creative approaches.

Sources: Fonte et al. 2006; Fonte 2006; Van der Meulen 2008; www.slowfood.es; www.slowfoodaustria.at;
www.slowfood.it; www.fondazioneslowfood.it; www.presidislowfood.it

56
Conclusions
A collective value-adding strategy around a traditional product of regional origin allows a
move away from price competition and lays down solid competitive foundations based on
quality and differentiation. Especially in rural settings, many small artisan agri-food producers
are caught between a rock and a hard place by having to face double competition from other
traditional artisan products and standardized industrial products. Meeting challenges head on
by committing to the collective reinvention of a typical product of regional origin becomes
in some regional areas in economical decline, the best, if not the only way to protect jobs,
earn a decent income and stem rural exodus. When the geographical and environmental
conditions of a place make it impossible to introduce intensive production systems, what can
be done is to join efforts, adopt an offensive niche strategy, leave behind resistance to change,
and move from simply producing the products to marketing them. In an environment where
a large number of producers in an area are forced to produce the same typical good, local
development must involve partially breaking the market dynamics and replacing them with
cooperation.

The starting point of any value-adding strategy is to recognize that a traditional product of
regional origin is not merely a generic agro-industrial product, but a potential high-end item.
The challenge is therefore to improve the typical product and make it a valuable good that
meets the expectations of a demanding clientele willing to pay for high quality and those
intangible attributes inherent in traditional products of regional origin: authenticity and
territorial link. To improve the quality of the product, create a differentiated image of it and
achieve a high position in the mind of the consumer requires huge investments in terms
of time and money. However, coordinating efforts and pooling resources within an origin
consortium make it possible to accumulate the productive, financial and technological capital
needed to implement the value-adding strategy.

Nevertheless, it would be wrong to limit the usefulness of these groups to just a matter of
economies of scale. While it is true that an origin consortium tends to attract mainly the
interest of small economic operators, it is equally true that this type of group is not just a
temporary tool for increasing the competitiveness of the “weakest”. Origin consortia are
established with the aim of lasting over time and not to be dissolved once its members have
reached a good position in the market. The unity around selling the same article creates
long-term dependency relationships among members, which must be formally coordinated.
Moreover, the origin consortia can perform functions that would be difficult to replace simply
with market transactions between a large number of economic operators. The fair redistribu-
tion of profits along the same value chain, control of production volumes to remain collectively
in an upper market segment and the institutionalization of production practices that respect
tradition and the environment are examples of aims that cannot be achieved without an
organic structure for agreement.

57
adding value to traditional products of regional origin

A technical cooperation project for promoting an origin consortium can combine the
promotion of economic progress and increased competitiveness with the preservation of the
historical, cultural and ecological legacy of a region. And this is exactly where UNIDO’s
interest lies in helping to create these types of groups in developing countries. However, as
discussed throughout this document, there are many factors to be taken into account when
establishing and promoting an origin consortium. Basically, there are three vectors that should
guide any intervention, and which are decisive for the success of any group in terms of
sustainable development: a warm welcome for the traditional product of regional origin in
the market, the equitable management of the various socio-economic interests along the
production chain and the positive impact of the joint project at a local level. To achieve these
three aims simultaneously, special attention will need to be paid to the following issues:

• The traditional product of regional origin to which value is to be added must be charac­
terized by its uniqueness and must represent an important source of revenue for the
economic operators involved in its production.

• The grouping process must be led by a promoter who mediates between economic
operators in the various links of the production chain involved and ensures that all stake-
holders start out with the same level of information as regards the potential scope of the
project; only in this way can all groups assert their interests from the outset.

• The set of specifications must be strict enough to underpin product differentiation and
be flexible enough to maintain commercial competition among members. The document
should acknowledge the contribution of each link in the production chain to the creation
of overall added value and must determine the means for achieving the non-economic
objectives of the consortium (the protection of biodiversity, traditional production
methods, culinary and cultural heritage, etc.).

• Only when members are ready to apply the specifications and when compliance with these
can be monitored, will it be appropriate to apply for the registration of a collective label.

• Geographical indications, collective marks and certification marks are suitable legal means
for protecting a traditional product of regional origin within the framework of an origin
consortium. Firstly, the use of these labels is open to a large number of independent
economic operators. Secondly, the three marks not only protect the product name, but
also attest to its quality characteristics. Choosing one or another legal means of protection
is not just a question of legal feasibility, but also depends on the socio-economic priorities
of the members. Especially the registration of an institutionalized geographical indication
may cause unexpected negative effects both for members of the consortium (loss of product
specificity, increased domestic competition) and external producers (exclusion effect).

• Strict control of compliance with the specifications on the part of members is necessary
for several reasons: it is a legal requirement for the use of certain shared labels; it lays
the foundations to guarantee the product’s quality standards on the long run; and makes
it possible to foster trust among consortium members. External certification does not
necessarily bring with it tangible benefits and, in any case, should always be combined
with internal control practices in order to reduce costs.

• The origin consortium can offer various services which help to maximize a product’s
success in the market and ensure the equitable distribution of costs, benefits and decision-
making power along the production chain. Examples of these services include providing

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 a guide to creating an origin consortium

model contracts, a quality-based redistribution system, coordinating group certification,

managing profit distribution among members and controlling quantity of supply.

• In order to achieve good positioning in the market, effective promotion of the traditional
product of regional origin is just as important as its high quality. All members must be
aligned around a joint marketing and communication strategy aimed at enhancing the
image of the product as a typical good that is closely linked to a specific territory. In
particular, short distribution channels must not be neglected, as they allow for a link to
be established between the consumer and the region the product originates from.

• Although the number of members in a consortium does not determine its level of internal
consistency, enlarging the membership may raise tensions between old and new members
and therefore the decision should be well thought out. Depending on the label under
which the product has been registered, this decision can be made more or less freely.

• For the consortium to be able to get started, the initial external technical, legal, financial
and promotional help is essential. Moreover, when the traditional product of regional
origin represents a cultural marker for a particular region, it can act as a unifying element
and a catalyst for a broad territorial promotional strategy involving numerous public and
private entities. In these cases, the consortium must ensure that effective marketing of
the typical product is not compromised by the ambitious local development objectives of
third parties.

59
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Annex
Product Specifications
Product with institutionalized geographical indication: United Kingdom

COUNCIL REGULATION (EC) No 510/2006 on Protected Geographical

Indications and Protected Designations of Origin.
“Cornish Sardines”
EC No:
PDO ( ) PGI (x)
This summary sets out the main elements of the product specification for information
purposes.

1.  Responsible department in the Member State: United Kingdom

Name: Department for Environment, Food and Rural Affairs
Food and Drink Manufacturing Team
Regional and Local Foods Team
Address: Area 8e, 9 Millbank
c/o Nobel House
17 Smith Square
London,
SWIP 3JR
United Kingdom
Tel: 0207 238 6075
Fax: 0207 238 5728
Email: [email protected]

2.   Group
Name: Cornish Sardine Management Association
Address: Trevint House
Strangways Villas, Truro,
Cornwall TR1 2PA
Tel: 01872 270333
Fax: 01872 242470
Email: [email protected]
Composition: producers/processors (15 ) other ( )

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3.  Type of product
Group 1.7: Fresh fish, molluscs and crustaceans and fish based products.

4. Specification (summary of requirements under Art.4 (2) of

Regulation (EC) No 510/2006)

4.1. Name
Cornish Sardines

4.2.  Description
Cornish Sardines is the name given to the pelagic fish of the species sardina pilchardus
which have been caught up to six miles off the Cornish coast, landed and processed
in the county of Cornwall. The colloquial name given to the fish is pilchard.

Cornish sardines/pilchards are metallic green or olive coloured along the back with
golden flanks and pearlescent silver shading to silvery-white on the belly. There are a
series of dark spots along the upper flanks, sometimes with a second or third series
below. The size of the fish can vary during the season. A kilo of sardines will contain
between 9-18 fish depending on the individual size of the fish.

The body is sub cylindrical, with a rounded belly showing a small ridge from gill
opening to anus. The hind margin of the gill is smoothly rounded with a 3-5 distinct
bony strive radiating downward on the lower operculum. The dorsal fin is at the
midpoint of the body, the last two anal fin rays are enlarged and there are 8 pelvic
finrays, the pelvic fin insertion is situated well behind dorsal; the largest scales of any
pelagic fish.

The flesh has a firm, fine texture when fresh, this soon softens and deteriorates
exponentially as temperatures rise above 1° Celsius. The individual strength of taste
varies with the freshness of the fish and level of fat in the flesh.

Fresh Cornish Sardines should be bright and firm, with most scales intact, gills should
be dark pink or red in colour. They should be plump and smell fresh and are at their
best in late summer when they are moist and full of taste. They may be sold either
fresh or frozen.

4.3.  Geographical area

The County of Cornwall including the sea areas of the Cornish Sea Fisheries
Committee (CSFC) area of jurisdiction—up to six miles off the Cornish Coast.

The jurisdiction of the Cornish Sea Fisheries District was created by order under the
provisions of the Sea Fisheries Regulation Act 1888 and was empowered to make
bylaws for the regulation of sea fisheries within the district. The CSFC is responsible
for the statutory enforcement of fisheries legislation around Cornwall’s coastline. The
coastal district covered is up to 6 miles offshore, around 1,350 nautical miles.

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4.4.  Proof of origin

When the catch has been made, fishermen record information including tonnage,
location, and depth caught, fishing methods, record of by-catch, etc, whilst they are
still on the vessels. This information is collected by the Cornwall Sea Fisheries
Committee (CSFC) for recording on to their databases. It is a requirement of the
Cornish Sardine Management Association to ensure that skippers and owners record
and submit details of the catch to CSFC. This information is evidence that the product
was caught within the geographical area.

Cornish Sardines are sold to fish merchants and fish processors, either at an auction
market or by a direct deal with the merchant/processor. The fishermen record which
processors have bought their fish to further ensure traceability throughout the supply
chain. The fish processors and merchants also keep detailed records of who they bought
from and who they sold the fish to. These records are kept by the processors to comply
with EU legislation on the traceability of fish products. This information is the evidence
that the fish was landed and processed within the geographical area.

All catches are recorded and monitored by CSFC and Defra. All processing is
monitored by the CSMA.

4.5.  Method of production

The Vessels are put to sea from their local ports around the coast of Cornwall. They
use ring nets and drift nets and operate in traditional areas close to the coast of
Cornwall and within six miles of the coast.

The Cornish Sardines are brought aboard from the drift or ring nets. Once on board,
Cornish Sardines are iced to maintain quality and freshness. The vessels use insulated
bins and some vessels use fish holds to store the fish in chilled conditions before being
taken ashore at a Cornish port.

Back on land the sardines are sold to merchants and fish processors either direct from
the vessel or at an auction market. The buyers collect the fish from the quayside or
market and take it to their factory in Cornwall. The fishermen record which processors
have bought their fish to ensure traceability throughout the supply chain and the infor-
mation is sent to the CSFC.

The fish can be processed in several ways but primary processing in this context is
regarded as any one, or a combination of filleting, heading, gutting, salting, marinating
freezing and packing.

• Filleting is defined as the manual or mechanical separation of the head and back-
bone from the meat.

• Heading and gutting is defined as removal of the head and intestine, with the tail
on or off.

• Salting or marinating is defined as the preservation of the product by the reduction

of the water phase, through the addition of salt and/or acids, to create an environ-
ment inhospitable to spoilage bacteria.

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adding value to traditional products of regional origin

• Freezing is defined as the entire product being brought and held below a tempera-
ture of zero degrees Celsius whereby it changes into a solid state.

• Packing is defined as being packed in individual containers of less than 10kg.

When whole, fresh fish is packaged in ice and cool boxes of 10 kilos or less for trans-
portation to customers. Otherwise the fish are frozen and packaged in boxes or bags
for frozen storage and then onward to customers. Any processing of the fish must take
place within the area of Cornwall.

Seafood Cornwall check that the processors adhere to the CSMA’s agreed minimum
quality and hygiene standards for processors.

4.6. Link
The characteristics of the Cornish Sardine are linked to the geographical area on the
basis of the tradition of catching and processing. These methods are well documented
traditional fishing practices.

The Cornish Sardine is drawn to the geographical area by its environment, i.e. the
conditions available to it in the shallow waters of the bays close to the Cornish coast.
These waters provide the sheltered environment preferred by the fish. The North
Atlantic Oscillation (NAO) is a climatic phenomenon of the Atlantic area in which
Cornwall lies and is generally responsible for the temperatures and tides which also
control where the phytoplankton i.e. food for Cornish Sardines is found.

The specific link with the geographical area is that fishing for the sardines takes place
when the fish move to these shallow bays. This characteristic style fishing technique is
reminiscent of the traditional practices of previous generations.

Traditionally, the fish were caught when they came closer to the shore. In the past this
was through actual sightings of the shoals by scouts, called ‘Huers’, who were on
located at viewing points on the cliffs. Once the shoals of fish were sighted, the lookouts
would direct (by a local semaphore) the vessels to make the catch through calling
‘hevva’, this signal was for fishermen and other townsfolk to come and help. The
fisherman began to shoot their long net ‘seine’ in a semi-circle around the shoal of
fish under the direction of the huer. The seine net and stop nets worked together to
completely enclose the fish.

The area was limited by the line of sight from the cliff tops. This tradition continues;
the knowledge of where the fish congregate has been passed down through generations,
although modern technology has replaced the cliff top watch. The addition of modern
technology means that the distance off shore has broadened over the decades but the
local fleets still stay within sight of the shore following the fish where they congregate
in shallow water. The geographical limits of the fish catching operations are all within
the 6 mile limit of the CSFC and the area therefore well describes the fish catching area.

Through the sixteenth to nineteenth century, pilchards, as the fish were more
commonly known at the time, were a valuable product. As food they were cured and

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exported over large distances, and their oil could be used to provide lighting and
heating. In the days before modern refrigeration methods, each fishing village had many
cellars where the pilchards were processed. They were placed in stone tanks salted and
pressed. The salt took the moisture out of the fish. When the fish had been pressed,
they were ready for market. The main market for Cornish pilchards was Italy.
They were shipped off in sailing ships to Naples, Genoa, Venice and Livorno. Over the
centuries fishing has been an important industry for Cornwall. Newlyn still lands more
fish than any other port in England and it is still an important part of the Cornish
economy.

Fishing for Cornish Sardines is a vital part of Cornwall’s heritage, the skill of locating
and catching the fish has been long established in Cornwall and has been handed down
over the generations. The fleet of vessels sail from ports, harbours and coves dotted
around the 329 mile Cornish Coastline. The specific link with the geographical area
is that when the fish move closer to the shore then they can be caught and in the past
this was through actual sightings of the shoals and now it is due to the knowledge
passed down through generations.

The delicate composition of the fish requires them to be landed promptly. The boats
return to their local Cornish ports and from there they are taken to factories in Corn-
wall for packaging, storage, processing. The fish processing takes place within the geo-
graphical area of Cornwall, and includes the traditional cove and ports where processing
took place in the past. The modern technology and hygiene standards and the pressures
on coastal property now means that the factories on industrial estates have taken over
from fish cellars in village harbours but all the factories are still within Cornwall.

The ‘Cornish Sardine Management Association’ (CSMA)—a group of fishermen and

merchants formed in 2002, their aim being to maintain a top quality product and
consider methods to manage and develop both the catching and marketing of Cornish
sardines. The use of the name Cornish Sardine and the reputation of the quality of
the product has grown in the past 10 years due to the hard work of the members of
the CSMA and the high quality of their product. Cornish Sardines have achieved an
increasing volume of sales particularly in the UK retail market where they have acquired
a cachet. Cornish Sardines can be found on sale in fish counters at major UK retailers
such as Waitrose, Tesco and Marks & Spencer.

4.7.  Inspection body

Name: Trading Standards
Cornwall County Council
County Hall
TRURO
TR1 3AY
Tel: 01872 322000
Email: [email protected]

Extract of the document available at:

www.defra.gov.uk/foodfarm/food/industry/regional/foodname/products/registered/index.htm

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Printed in Austria
V.11-83028–May 2011–100

Adding value to traditional

products of regional origin
A guide to creating an origin consortium

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

Business, Investment and Technology Services Branch
Mr. Fabio Russo
Vienna International Centre, P.O. Box 300, 1400 Vienna, Austria
E-mail: [email protected], Internet: www.unido.org/exportconsortia