By William Van Caenegem and Kana Nakano
The Potential of Geographical Indications for Australian Producers
After almost 6 years of anticipation, Australia finally concluded negotiations on its Free Trade Agreement (FTA) with the European Union (EU) earlier this year. The negotiations have been fraught with difficulties, and a major sticking point has been the Europeans’ push for recognition and protection of their well-known geographical indication products in the Australian market — such as Prosecco, Feta, Gruyere, Parmigiano Reggiano. Throughout negotiations, most of the focus has been on the loss of these terms by Australian producers and costs of rebranding. While these are legitimate concerns, there are several exceptions, phase out periods and grandfathering for more commonly used European geographical indications (GIs) in the concluded deal which will soften the impacts. Focussing on what is lost in the deal risks overlooking a far more important economic shift resulting from the FTA: Australia must now seriously consider the introduction of a comprehensive domestic GI system for the agricultural foods and spirit sector. Such a system could be a major commercial tool for Australian producers.
GIs identify a product as being linked to a particular regional area. Depending on the system of protection, GIs typically provide a unique form of protection which gives its producers stronger safeguards around the use of the regional name. GIs have long been protected in the EU and they have enabled regional producers to escape the commodity market by differentiating their goods, secure price premiums and enforce global protection of their reputation.
Australia introduced a GI system for wine long ago when it agreed to give up the use of many well-known European wine GIs — such as Champagne, Port and Bordeaux. Outside of wine, no similar system for the protection of food or spirits has been introduced. Australian producers have instead had to rely on the existing certification trade marks system, which present several difficulties in terms of protecting regional names and products. They can also fall back on passing off or section 18 of the Australian Consumer Law (misleading and deceptive conduct in trade), but that is a very challenging route to follow. This has led to a situation where many Australian producers with strong regional identities compete under generic names with limited legal protection.
Australia has agreed to protect 396 European GIs for agricultural products and spirits, but in doing so, has committed to developing a domestic GI framework for its own spirits and agricultural products. In the long run, this may prove to be one of the most commercially significant outcomes from the agreement. A domestic GI framework, if designed carefully, will enable producers to better protect regionally important products both in Australia and in export markets. Fortunately, there are a number of obvious candidates that could take advantage of such a system.
Tasmanian Whisky presents a clear choice as it has a reputation for being a quality product that is tied to its local conditions and has increasing recognition. A stronger domestic GI system would define exactly what constitutes Tasmanian Whisky, protect its reputation and prevent misuse of the name in overseas markets. King Island beef is another clear candidate that is a regionally linked product. Currently, its value sits more in corporate branding. The beef is known for its quality and is therefore a major target for counterfeiting; a domestic GI framework would provide greater protection for King Island producers and clarity around when beef can be labelled as King Island product. The commercial benefits of protecting even just a small number of well-known, quality regional products can be significant. Other examples of Australian food GIs will undoubtedly emerge.
Introducing a domestic GI system in Australia will enable its producers to achieve reciprocal protection in export markets through trade negotiations, just as the European Union has done with the FTA. It will enhance the quality and value of local Australian food products. So while the deal might limit or restrict the use of certain familiar names for agricultural and spirit products, there is a real opportunity for Australian producers to invest in their own quality products that are linked to regional names. They will be more secure from free-riders and imitators if they do so.