Marketing 13th Edition by Gary Armstrong, Philip Kotler

Exercise 3

Scotch Whiskey, Champagne Sparkling Wine, Parmesan Cheese, Dijon Mustard-what do all of these have in com-mon? They are not brand names but rather geographical indicators (GIs) of the origins of these foodstuffs. Europe has a long history of gastronomical delicacies that the European Union has been eager to protect for economic reasons. For example, not just any sparkling wine can be labeled champagne because only sparkling wine produced in the Champagne region of France can put that on the label. The British government is launching a registry of Scottish whiskey makers to protect its $4 billion industry from imita-tors who label their whiskey as Scotch. True Scotch must be aged in oak casks in Scotland for at least three years. Dijon mustard must be produced in Dijon, France, with chardonnay wine from the Burgundy wine region. Parmesan cheese was developed more than 2,000 years ago in Parma, Italy, which also boasts Parma ham (Prosciutto di Parma). True Swiss cheeses, such as Emmental, Gruyere, and other varieties, are produced in Switzerland following strict rules to guarantee purity, and the authorities there identify counterfeits with DNA fingerprinting based on the 10,000 strains of milk bacteria that are used for authentic Swiss cheeses. All of these come with a higher price tag for consumers. For example, Portugal Algarve Salt and French Fleur De Sel sea salt cost about $80 per pound compared with 300 per pound for regular table salt.
Do geographical indications (GIs) offer benefits to consumers? Are there disadvantages for sellers? Explain. (AACSB: Communication; Reflective Thinking)