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GEOGRAPHICAL INDICATIONS

Some Japanese brand legacies stand to profit from geographical indication; others, not so much

by

Staff Writer

In the not so distant future, Kraft Parmesan, a household name for grated cheese with its distinctive green package sold by a Japanese dairy company, may disappear from shelves in Japan or reappear bearing a different name.

That is one example of what may happen after Japan and the European Union agreed to protect each other’s signature food and other agricultural products designated as geographical indications (GI). It is part of an economic partnership framework that the two sides came to a broad agreement in July.

The following is a brief rundown of the kinds of products covered under GI and the rules governing the designation.

What is the purpose of geographical indication?

Geographical indications are aimed at protecting regional food products that have obtained high quality and reputation as a result of unique farming methods and distinctive characteristics, including climate and soil conditions.

Normally GI-registered products bear the distinctive name of their location of origin, such as Kobe beef.

Once a product is so recognized by the government, only designated producers can sell their product using the name. This prevents unauthorized third parties from selling products using the listed name or something similar.

The GI system was introduced in Japan in June 2015, and 39 food and agricultural products were registered as of August, according to the agriculture ministry. The registered products have a GI mark to indicate authenticity.

An individual who sells unapproved products bearing a registered name can face up to five years in prison and up to a ¥5 million fine, or up to a ¥300 million fine in the case of an organization.

The agriculture ministry is responsible for registering food and other agricultural products, while the National Tax Agency, which oversees the sales of alcoholic beverages, is in charge of the liquor list.

What kind of products are registered as GI?

GI products include globally recognized names such as Kobe beef, Japanese sake and Yubari melons, as well as more locally known specialties such as Aomori cassis, Shimonoseki pufferfish from Yamaguchi Prefecture and Yoshikawa eggplants from Fukui Prefecture.

Farmers and food processors can submit an application for registration for their products as a group. The government then examines whether a product’s quality and reputation have strong connections to its production location and whether the product has traditional value specific to the area, such as if it has been produced in the same location for about 25 years or more.

For example, Yubari melons produced in Yubari, Hokkaido, made the list thanks to their juiciness and mellow flavor nurtured through the significant temperature swings between day and night, low precipitation and good drainage of the area’s volcanic ash soil, according to the agriculture ministry.

Once it passes government screening, a product is placed on the GI list and producers pay a registration fee of ¥90,000 to the government.

Some non-food products, such as Kumamoto igusa (straw reeds) and tatami mats made of Kumamoto reed, are also listed.

Why do producers want their products to be registered as GI?

The biggest reason is to prevent cheaper, lower-quality products bearing the same or similar name from being sold. The designation makes it easier for producers to protect their brand, according to the agriculture ministry.

Being listed as GI also boosts the sales of the product.

For example, the sales of Aomori cassis tripled between January and March 2016 from the same period a year before after being registered as GI in December 2015, according to the ministry. The price of Yubari melons also rose 10 percent after they were registered as GI.

The ministry also says the increasing brand awareness could result in more farmers underpinning production of traditional agricultural products.

How does GI play a role in international trade?

GI products will be treated the same way in the exporting country if the two sides agree to protect each other’s registered products.

The economic partnership agreement inked with the EU in July was the first such case for Japan to exchange the protection list of agricultural products with foreign nations. Japan has in the past concluded an agreement for liquor brands with Mexico, Chile and Peru.

The EU’s list covered 71 brand names of cheese, olive oil and other foods, including Gorgonzola, Parmigiano Reggiano, Prosciutto Toscano and Scottish Farmed Salmon, according to the agriculture ministry.

The list of liquors also included names of 139 alcohol beverages, including popular ones such as Bordeaux, Champagne and Scotch whisky, according to the National Tax Agency.

Once the deal takes effect, Japan can ask the EU not to sell GI-listed products produced by other countries, and vice-versa. For example, EU dairy farmers won’t be able to name a locally raised beef as Kobe beef, while Japanese cheese makers cannot sell cheese named Gorgonzola or similar names branded as “Gorgonzola-styled” cheese.

The agriculture ministry believes this will boost brand awareness of made-in-Japan products overseas while protecting brand value from counterfeit products.

Some food products using Japan’s geolocation name are already sold in other countries, such as melons branded as “Yubari Japan Melon” in Thailand and “Hokkaido Udon” made in Hong Kong, according to an agriculture ministry report published in March.

Are there any concerns?

Some domestic farmers and food industries may have to change the name of their products once the deal with the EU takes effect.

For example, the popular Kraft Parmesan grated cheese, sold in Japan by Morinaga Milk Industry Co., which boasts the biggest share in the domestic grated cheese market, may have to change its name. The product name comes from the English translation of Parmigiano Reggiano but is made of U.S. natural cheese.

The EU Court of Justice ruled in 2008 that the name Parmesan can be used within the EU only for Italian-made Parmigiano Reggiano cheese registered in the EU’s protected designation of origin (PDO) system.

A Morinaga Milk spokesman declined to comment on this issue.

The agriculture ministry and the national tax agency are accepting opinions from the public sector regarding possible restrictions caused by the deal until October.