English Champagne? Geographical Indications (GIs) and productivity after Brexit

Lead Research Organisation: University of Warwick
Department Name: Warwick Business School

Abstract

This research would be the first to consider the growth and productivity benefits of Geographical Indications (GIs) in the UK. It will provide an evidence-base for effective policy development and governance in this area post-Brexit. Our project directly addresses the economic challenges and opportunities of Brexit highlighted in the Call Specification, and will support the emphasis of the Industrial Strategy on enhancing UK innovation and productivity.

Since 1992 the EU has provided protection for specific agricultural products and foodstuffs. Inspired by the French AOC (Appellation d'Origine Contrôlée) and Italian DOC (Denominazione d'Origine Controllata) systems, protection is typically related to products of a specific geography, traditional manufacturing activity and environment (Cannarella and Piccioni 2011).

Across the EU there are currently three types of EU quality designations known collectively as Geographical Indications or 'GIs'. There are 70 registered UK GI's, with another 9 in the application and registration process . Protected Designation of Origins (PDOs) are the strongest designation requiring that agricultural products or foodstuffs are produced, processed and prepared in a specific geographical area, using recognized know-how. Of the 79 UK GIs, 28 are PDOs including Welsh Laverbread, Isle of Man Manx Loaghtan Lamb and a range of locally produced cheeses including Single Gloucester. Protected Geographical Indications (PGIs) have less stringent requirements and require that some stage of the production, processing or preparation of a product occurs in a specific area although raw materials used do not need to come from the locality. There are 45 UK PGIs including Traditional Welsh Perry, Carmarthen Ham, and Yorkshire Wensleydale. Finally, Traditional Speciality Guaranteeds (TSGs) cover products and foodstuffs produced using traditional materials, production methods or composition without any element of geographical specificity. There are currently six UK TSGs including Traditionally Reared Pedigree Welsh Pork and Traditional Bramley Apple Pie Filling. There are currently eight UK applications for GI status including the Forfar Bridie, Broighter Gold Rapeseed Oil, 'Ayrshire New Potatoes'/'Ayrshire Earlies', and The Vale of Clwyd Denbigh Plum.

After Brexit the application of the current EU system for the approval and governance of GIs in the UK will cease, and GIs in the UK will be subject to the more basic provisions of the World Trade Organisation TRIPs Agreement. Here, we aim to establish whether GIs are an effective policy instrument for boosting growth and productivity and, therefore, whether developing a UK GI system should be a policy priority post-Brexit.

Our project comprises two main elements. First, a look backwards to assess the impact of existing GIs in the UK on growth and productivity. This will be done using best practice econometric approaches and company case studies and provide robust evidence for the value (or otherwise) of GIs. Second, a forward look to identify strategies and processes which could be adopted in the UK to support GIs in the future. This will involve a review of international best practice and a series of regional consultations to identify possible candidate products for future GIs.

The development of our project has been shaped by guidance from the lead government departments - DEFRA and IPO - and we will develop a project advisory group early in the life of the project. An impact strategy (see below) will reflect academic dissemination and engagement with related government departments and industry support organisations. The research proposed would take place within the existing ESRC funded Enterprise Research Centre or ERC (see www.enterpriseresearch.ac.uk) which has a focus on policy-related research related to the growth and development of small and medium-sized businesses (SMEs).

Planned Impact

This project will be based within the Enterprise Research Centre at Warwick Business School. The core aim of the ERC is to provide independent, trusted expertise and insight into SME performance and growth, based on rigorous research and analysis. We enable users to access high quality information, thereby strengthening the evidence base upon which they can make decisions, allocate resources and build policy. GIs have the potential to benefit SME performance across the food and agricultural sectors making this of central concern to ERC.

We will create a small, focused Project Advisory Group, comprising policy partners as well as the ERC Deputy Director for Impact and Engagement which will work with the fellow to develop and deliver impact. In association with the lead Departments (DEFRA and IPO) during the first four months of the project we will develop a collaborative impact and engagement plan. This will include a series of measurable KPIs reflecting engagement, influence and impacts. During the project it is also envisaged that:
(a) Monthly telephone conferences will be arranged with lead stakeholders to ensure delivery and continued engagement.
(b) The project will involve an intensive programme of engagement with producers who are supported by GIs in Phase 1, and potential GIs in Phase 2 to ascertain potential productivity enablers and facilitate diffusion.

We see three priority audiences for this project which overlap with ERC's existing user groups. The project will be able to draw on ERC's existing networks and partnerships, particularly to address policy and academic audiences.
1. National and regional policy makers and influencers (e.g. officials at DEFRA, IPO and in the devolved territories) - the ERC team has a strong track record of active soft and formal engagement with this group, which will continue during this project and develop robust research findings and expertise that can inform policy thinking and decisions.
2. Producers and food-industry groups (e.g. FSB, BCC, CBI) - this project has the potential to better understand the impact of GIs, and ultimately influence the behaviour and performance of producers.
3. Academic researchers with an interest in food production and regional development - this is a topic of increasing academic interest given the productivity slowdown across the advanced economies. ERC has well developed protocols for academic dissemination (see below).

ERC has also developed a number of engagement channels which we can use to promote the work of the project. The media is a key dissemination channel for the Centre. We have developed a network of key media contacts with have an interest in business research and related issues. In addition, ERC's current Twitter feed has over 1,600 followers, and we have evidence of effective click-through to view web content. We will also make increased use of LinkedIn to reach the professional and business community. ERC's monthly email Newsletter, which currently has over 1,500 subscribers, can also be used to publicise the work of the project.

Publications

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Description Post-Brexit the UK government has committed to the implementation of a new UK system of Protected Food Names (PFNs). These will replace the EU Geographical Indications of Origin (GI) regulations for sales in the UK market. GIs, and potentially PFNs, can have significant benefits. Here, we combine case study and econometric methods to consider GIs' impact on preserving and strengthening food heritage and producer growth. Our case study analysis suggests that GIs can play an important role in the heritagisation of food products although this depends critically on a range of operational factors. Our econometric analysis is limited to a small number of factory-based GIs and small number of producers for which longitudinal data is available. Using a Propensity Score Matching-Difference in Difference approach suggests that the GIs we consider have had no significant growth effects on producers over two years but may have longer term employment growth effects over four years. We find no evidence of any significant longer-term sales effect. This may reflect relatively low levels of consumer awareness of GI labelling in the UK and potential overlaps between GI labels and producers' own branding. Significant caveats apply to our econometric analysis but our results suggest there is limited justification in terms of producer growth for any significant increase in the number of GIs through the Protected Food Names scheme post-Brexit. More persuasive arguments for increasing the number of PFNs in the UK relate to the preservation of food heritage and, when combined with other local support mechanisms, their potential contribution to local food and drink tourism.
Exploitation Route Too early to say
Sectors Agriculture, Food and Drink,Culture, Heritage, Museums and Collections

 
Description Discussion about research outcomes with DEFRA and IPO 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Telephone conference with policy officals to discuss and update them on research outcomes
Year(s) Of Engagement Activity 2020