A paper on the relative merits of GI and trademark protection in the coffee sector has been posted in the Estey Centre Journal of International Law and Trade Policy. The paper suggests that given the particularities of the coffee market, it might make sense to opt for GI protection in some circumstances and to use trademark protection in other circumstances. However, it notes that if farmers are to derive financial benefit from the higher prices which single-origin coffee can obtain, then ‘further steps have to be taken’, most notably with regard to strengthening the bargaining position of farmers’ associations.

The paper notes that while coffee farmers have faced a major income crisis, coffee roasters in the north have benefited from the ‘latte revolution’, with retail coffee prices continuing to rise in the speciality market. Two main factors were held to lie behind this ‘coffee paradox’: the constant oversupply of low-quality robusta coffee and the specific structure of the coffee market, which is dominated by a few global corporations in the processing and retail chains. The analysis notes that there remains, however, a shortage of high-quality coffee. It is against this background that coffee producers are exploring the scope for the production and marketing of high-quality, single-origin coffee.

The paper notes that neither trademark protection nor GI protection can be obtained at a worldwide level, with both needing to be sought under national (or, in the case of the EU, regional) jurisdictions. Indeed, it notes in this context that GIs in the USA are primarily protected under the existing trademark regime, unlike in the EU where a sui generis GI regime has been developed. However GIs can be registered in the EU as trademarks or collective marks. Thus trademarks and GIs can comfortably coexist, even in the EU.

The paper notes the more expensive and time-consuming nature of GI registration, particularly in countries where quality certification agencies do not already exist. The paper contrasts the experience of Colombia and Ethiopia in this regard. In the case of Colombia, both trademarks (and logos) and GI protection are used to try to capture the commercial value of high-quality, single-origin coffee. In the case of Ethiopia, trademark protection has been used (under the Ethiopian Fine Coffee Trademarking and Licensing Initiative). This arises in part from the difficulties which Ethiopia would face in effectively implementing GI schemes (i.e. certifying compliance), given the smallholder-based production system in place (compared to estate-based production in Colombia) and the lack of existing institutional capacity to guarantee that specified quality standards are met. In Colombia, such a system was already in place.

The paper explores which form of protection offers the most market control, and concludes that this is critically determined by the wider marketing strategies adopted and the licensing agreements concluded. Whether the commercial benefits of quality production are fully realised also depends on the relationships established with distributors, retailers and roasters. In the case of Ethiopian fine coffee, there is a high dependence at present on the branding and promotional programmes of distributors, retailers and roasters.

The paper notes that ‘single-origin coffee is detached from the (New York) commodity price for coffee’, since ‘through trademark and geographical indication schemes, producing countries are able to connect the export price to the retail price’. Theoretically this should bring benefits to producers. However this depends on the structure of the market in the country concerned. It notes that in the case of smallholder production systems like those in Ethiopia, local speculators and exporters play major roles, with most of the price premium accruing to these actors in the supply chain. The paper cautions that ‘neither geographical indications nor trademark systems are able to secure for individual farmers the benefits of the higher prices paid for single-origin coffee’. For producers to secure greater benefits, both a strengthening of farmers’ associations and improving information flows on coffee market prices are essential.

Overall the paper concludes that in the coffee sector, ‘producing a niche market, quality product such as single-origin coffee is one possible way to overcome the current coffee crisis’, with either trademarks or GIs being used. The decision on which route to follow needs to be taken on a case-by-case basis.