ECONOMIC RATIONALE FOR PROTECTED GEOGRAPHICAL IDENTIFICATION INTRODUCTION FOR LATVIAN CANNED SPRATS

Abstract

The article raises the question of economic rationale of including Latvian sprat to the protected geographical identification (GI) register of the European Commission. GIs aims to address the situation of asymmetric information on the market specifically a situation when high-quality foodstuffs customers’ loyalty and trust can be jeopardized by presence of sub-optimal products. One of the means to help customers and producers confront the information asymmetries and possess more control over the situation is the institute of trademarking. GIs can be understood as a type of trademarking, however, since the GI does not belong to a single company but rather to a product and is used by many companies simultaneously, the GIs are rather seen as a type of collective monopoly right reinforcing collective responsibility of producers. The aim of the current research to evaluate theoretical and economic background of GI-labelling and possibilities for GIs introduction to canned sprat industry in Latvia as well as sketch the relevance of GI introduction to Latvian canned sprats. According to the economic theory, a number of acute problems in the canned sprat industry in Latvia can be resolved by participating in the GI scheme and protecting the traditional producing of Latvian sprat at the European level. Latvian canned sprats is one of the food stuffs that would benefit from the certification both in the local market and exported. The key structural events to be mobilized to realize the potential of a GI-labelling introduction to the canned sprats sector in Latvia are indicated in the article along with the GIs theoretic introduction and discussion.

Keywords: canned sprats, high-quality added value foodstuff, Latvia, Protected Geographical Identifications

Article DOI: http://doi.org/10.15544/RD.2017.119