The U.S. Dairy Exporter Blog: Market Analysis, Research & News

  • Defending Generic Cheese Names: Why You Should Care

    By Shawna Morris April 11, 2011

    The great wines and spirits of Europe had a great impact on the world’s palate over the centuries. Yet, in the 1980s, the European Union (EU) began to regret that many countries were creating unwelcome competition by matching—and sometimes exceeding—the quality of what it considered its heritage products. Therefore, the bloc sought to regain control of the Old World names.

    More recently, the EU’s campaign to pocket the sole rights to use many generic cheese names started only in the early years of this century. This action began when a new treaty under the Doha Round of the World Trade Organization (WTO) became a real possibility.

    The EU strategy was simple and clever. With the prospect of being forced to accept lower domestic supports, no export subsidies and lower tariffs, its dairy industry was going to face stiffer competition from imports. It found a new way to shield its industry through a system of “geographical indications” (GIs).

    The bloc built the scheme off a system that protected the exclusive origin of what had previously been locally produced, largely artisan products. While the original concept did provide some appropriate protection, the EU focused heavily on staging a market share grab for the most well known and commonly used names.

    For some time, USDEC, together with other domestic and overseas organizations, fought this attempt to wall off certain names for exclusive use by certain EU localities both in WTO negotiations and in the EU’s internal market. At the WTO, staunch opposition from the United States and others, as well as the lagging overall negotiations, slowed the EU’s effort. But internally, the bloc continues to grant exclusive usage rights for some of the most well known cheese names, including parmesan and feta, in a way that ridicules the original concept of protecting niche products.

    So why should the U.S. cheese industry care?

    When it became clear that the current WTO talks were stalling, the EU began including GI language in its free trade agreements (FTAs) that would require its FTA partners to enforce the exclusive use of many long-since generic names on all cheese sold within their borders, domestic or imported. It was successful in inserting varying levels of these types of cheese protections into its FTAs with South Korea, Central America, Colombia and Peru. It is also trying to do the same in ongoing negotiations with Canada and other major markets around the world

    Where full-blown FTA talks are unfeasible, the bloc is pursuing other methods, such as economic agreements with intellectual property protections, like the one signed recently with China that granted protection for several GIs, including West Country Farmhouse Cheddar. If China wants to protect the use of “West Country Farmhouse Cheddar”—a very narrow geographically defined artisan cheese—that’s fine. But, if the outcome ends up being that the EU preserves exclusive use of the word “cheddar” in all of China, then there goes a market of 1.3 billion people!

    It’s clear that the EU wants to replace generic names with established GIs to make it much more difficult for the United States and other suppliers to compete by forcing exporters to re-label and rebrand products. This is not a theoretical problem—it is happening now in many markets where the United States is building a vibrant export business and the sales potential is large.

    U.S. cheese exports hit a record 173,530 metric tons in 2010 (a gain of 60 percent over 2009), worth nearly $700 million—that’s almost one-fifth of the total value of U.S. exports last year. The EU is angling to remove our ability to grow those numbers further and become the significant future cheese exporter that we as a country need to be.

    The EU tries to sidestep a critical point by arguing that we shouldn’t care about many of the names because we don’t export significant volumes of some of the varieties, such as feta or gorgonzola. Of course, until a few years ago, we weren’t shipping much mozzarella or cheddar overseas. Imagine if we had decided to remain content with that!

    It would be foolish to freeze the possible range of our exported cheese offerings, especially in light of our dynamically growing artisan cheese skills.

    The even more dangerous question about the EU’s GI push is where it will end. If the EU were willing to take on major manufacturers in its own backyard, such as German and Danish parmesan makers, who is to say that 10 years from now it won’t go after provolone or mozzarella globally? Or aggressively try to prevent us from even using such names in the United States once it establishes a strong precedent in many other countries?

    Despite the efforts of USDEC, other domestic organizations and our government, we remain concerned about the ultimate outcome. We are currently bringing a switchblade to a blazing gun fight. We can’t depend solely on our overstretched government officials to fight the EU all around the world.

    We face a big and growing challenge—one that will require the entire industry to raise its collective voice to defend both our domestic and export market shares.

    In the coming weeks and months, USDEC is preparing a proposal to upgrade our weapons in this global battle to defend our most important generic cheese names. We look forward to working with concerned U.S. cheese manufacturers, international allies and other leading U.S. associations to ensure that the EU is not successful in confining the U.S. cheese industry to lower value, commodity cheeses.

    (This article first appeared in Cheese Market News in April 2011.)

    The U.S. Dairy Export Council represents dairy farmers, proprietary processors, cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. competitiveness and increase global sales of U.S. dairy ingredients and products.

     

    Trade Policy Cheese Geographical Indications (GIs)
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