EFOW’s position paper on the reform of the quality policy

I. Management of the production potential: the organisations in charge of the GI should manage the production in order to safeguard and promote the products of quality

In its Communication, the European Commission highlights that the PDO and PGI products insist to have the tools to control their sector, which really allows the rise of the production in terms of image, prestige and reliability, with consequences on the rise of the remuneration. The subject of the management of the production is fundamental for the wine sector, particularly in view of the forthcoming liberalizations, tabled in the recent wine CMO.

Nowadays, the wine sector has a legally recognized management tool: the planting rights. The abolition of this right, planned for 2015, will lead to the doubling of the planted areas and to a possible overproduction crisis.

On the basis of producers experience, it has emerged that the management of the product quality through the PDOs and PGIs specifications, and the protection against usurpations are not sufficient for the development of our GI products. We need other tools that allow us to manage the quantity produced to meet the demand of the market.

GI wines need tools which enable them to manage in a balanced and rational way the development of their markets, in order to prevent crisis. Indeed, the European competition rules concerning the agricultural sector need to be updated, and the first part of this reform should include the organisations in charge of the GI, which must be given the possibility to manage the production in order to assume a more influential role on the market, especially when they represent products whose high quality and craftsmanship is tied to small and numerous production structures and, therefore, are very weak in their relation to the markets. There is a common necessity to be able to manage the volumes produced and the way the products are placed on the market because the function of protection, supervision and promotion are essential but not sufficient to affect the income of the producers.

It is necessary to underline that consumers do not benefit from crisis on the market. Often prices go down at the production level, but not at the consumer level. When producers are put under pressure from a financial point of view, there is a serious risk that the quality can suffer. This is why it is important to prevent crisis and this can be done through the management of production. As demonstrated in the Champagne area, the management of the volume of production has not had a negative impact on the price for consumers: in the last 30 years the price of Champagne bottles leaving the region has risen by an average of 0.30 % per annum. The regulation of the production has not a speculative objective but aims at supporting the development of GI products.

PDOs and PGIs are perceived as trademarks by consumers. However, while trademark holders can manage their production, PDO and PGI producers cannot do so. It is important to stress that GIs are intellectual property rights. As a result, the holders of these rights should be able to manage them, including at the production level. Let’s not forget that the success of many GIs is due to the fact that for a long time these GIs have been managed and protected at both the quality and quantity levels. We are not asking for a specific support measure, but for the setting-up of tools which would allow us to manage in a harmonious way the development of our markets and to prevent crisis.

II. The need to maintain the two concepts: PDO and PGI

In its communication on the quality policy, the European Commission considers that it is necessary to simplify the current legal framework. In particular, it states that one option could be to merge the existing PDO and PGI instruments into one concept.

We strongly oppose this move as it would simply dilute the PDO into a concept closer to the PGI in which there is more freedom to operate. There are major differences between the PDO and PGI concepts with regard to the link between the product and its area of origin, as well as regarding the production and transformation requirements. It is necessary to maintain two separate instruments, one for the PGI and one for the PDO which is based on more than 200 years of history in the wine sector.

III. Maintain a single European and international protection system

In its Communication the European Commission states “that not all the registered geographical indications have a reputation and a commercial potential that transcend national borders”. This reasoning backs the fact that various level of protection in the EU should be developed: well-know PDOs and PGIs with a commercial potential will be protected at the European level, while the others will merely be protected on a national/regional scale.

This differentiation is inappropriate and prejudicial for the consequences that it might create for producers as well as for consumers:

– producers will not be guaranteed the protection of their intellectual property right, an inalienable right;

– it will create confusion in the mind of consumers who will no longer be able to distinguish between an original product and a counterfeit one.

Question: How can we imagine developing a system that protects a GI only at local or national level and does not foresee such protection at the European single market level? What would be the consequences, if a protection at the European level did not exist, for a GI product if it were to be protected in a Member State but was counterfeited in another? (Ex. the Parmesan Case in Germany: emblematic case that demonstrated that even when there are clearly established rules at EU level it is difficult and expensive to secure full GI protection).

If all GIs are not equally protected, the newly registered ones will have fewer rights. The problems of usurpations and counterfeits in third countries markets would not be resolved if the system proposed by the European Commission is adopted, since less notorious GIs that will try to be protected in third markets will have to face well established counterfeits. Therefore, the export criterion cannot be a valid argument for implementing two parallel levels of protection.

IV. Strengthen the GI system at international level

GI producers are confronted on a daily basis with cases of usurpation in markets (some quite important) all around the world. It is a problem that is very costly for producers: they spend millions of euros every year in legal actions, losing important market opportunities and suffering considerable damages of image and credibility. Moreover, the consumer also suffers since he is mislead both on the quality and the origin of the product that he acquires.

Although the progress in this field is slow, we have noticed positive signals thanks to the remarkable and continuous efforts brought forth by the European Commission to adapt the international protection systems to the needs of GI protection. In fact, nowadays, there is an increasing number of countries that develop their own GI protection system which is open to our GI products.

We are carefully following the ongoing negotiations and we truly hope that the European Commission will continue the efforts to obtain:

– a strengthening of the rules at WTO level, in particular as regards the creation of a multilateral register with real legal effects;

– continue negotiating regional and bilateral agreements with “strategic countries”,

– the insertion of GIs protection in the scopes of the ACTA agreement (Anti-Counterfeiting Trade Agreement).