Geographical Indications Affect Import and Export Prices

Geographical indications are essential for international cheese trading. A protected name such as Roquefort achieves a higher price premium than a compound name such as Gouda Holland where the cheese type (Gouda) itself is not protected.

Protected geographical indications (GIs) are a crucial marketing tool in the agri-food sector, especially in Europe.  Designations such as PDO (protected designation of origin) and PGI (protected geographical indication) signal a product’s unique qualities and geographical origin.

A recent Agroscope study explored the role of protected geographical indications on price premiums for Swiss cheese imports and exports. The researchers differentiated between the following cheese designations: single-name cheeses (e.g. Roquefort, Grana Padano, Gruyère) where the whole cheese is protected, and compound-name cheeses such as Gouda Holland or Raclette du Valais, where only the full name is protected. In this case, the generic cheese type itself (here Gouda and Raclette) is not protected and can be used for products from other regions. The study is based on a comprehensive dataset of Swiss cheese imports and exports from 2002 to 2021. The researchers also differentiated between cheese with a registered trademark and other non-branded, non-GI cheeses (see table).

GI names matter

The results show that cheeses with fully protected single-name GIs achieve a price premium of around 5% compared with similar products, whereas those with a compound PDO/PGI name attract no significant price premium. This is because the latter are competing with similar-sounding look-alikes. A Gouda Holland competes on price with a Gouda from a different country of origin as the generic name Gouda is not itself protected. However, a Roquefort can clearly differentiate itself from other blue-veined sheep’s cheeses on name alone. Products with a fully protected geographical indication therefore tend to be perceived as unique. On the other hand, PDO/PGI products with a compound name consisting of (unprotected) cheese type and geographical origin have difficulty distinguishing themselves from other products.

Brands as an alternative to GIs

Like GIs, a registered trademark such as Babybel or Appenzeller can also signal quality and command a higher price. However, in our sample we found no significant price premium for branded cheese products compared with similar non-branded products. Although individual cheese brands can benefit from a strong marketing strategy, no significant aggregate effect was found for imports and exports at wholesale level.

Good cheese will get good prices

Overall, it appears that PDO/PGI status and branding explains only a small fraction of the price. Instead, we found product type (blue-veined, soft, herb cheese, etc.) to be the main driver of import and export prices.  So rather than delving into the details of GIs and branding, a quality strategy should focus initially on the high-end processing and refinement of (cheese) products.

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