Editorial Board

Europe’s Food-Label Protections Don’t Pass the Smell Test

As the U.S. and the European Union begin hammering out a free-trade pact, there are good reasons to expect they will fulfill a promise to finish the job by the end of 2014. Both sides seem prepared to make concessions over longstanding disputes, including the EU ban on genetically modified food or U.S. restrictions on foreign shippers.

It would be a shame if all that goodwill were squandered in a quasi-metaphysical debate over .

At issue is Europe’s insistence that the U.S. recognize “geographical indications,” the trademark-like protections that are granted to foods and beverages according to their region of origin, distinct method of production and provenance of ingredients.

Parmesan cheese is a good example. Parmigiano-Reggiano refers to a unique item produced with specific ingredients only in a particular region of northern Italy -- and that name is protected. The EU also prohibits the sale within its member states of cheeses that “evoke” Parmigiano-Reggiano and are labeled, for example, parmesan. The ban even extends to products described as parmesan-like or parmesan-style.

Parmesan Ban

To U.S. cheese makers such as Kraft Foods Group Inc., as well as smaller artisanal producers of parmesan, this amounts to a de facto ban on their products in the EU. In Europe, Kraft is only allowed to sell its parmesan brands, which it began producing in 1945, under the nonsensical name of “Pamesello Italiano.” The U.S. reasonably argues that some names -- cheddar or mortadella bologna -- entered common usage long ago and are generic references to a product made universally.

We agree. Kraft’s grated parmesan should be allowed to compete with Parmigiano-Reggiano on store shelves in the U.S. and Europe, so long as both are clearly labeled and consumers aren’t misled. The EU’s attempt to claw back words and names from the global vocabulary amounts to little more than protectionism.

Consumers everywhere are able to distinguish between Parmigiano-Reggiano and its “-style” or “-like” imitators when the products are clearly labeled, as U.S. trademark law demands. If the producers of the original think they are losing market share to a lesser version, it’s up to them to convince the public of the value of the genuine article through promotion and advertising, not by inhibiting competition.

Feta cheese is a good example of the EU’s overreach. Greece and the EU have long argued that the name Feta should only be applied to the cheese that is made in Greece, even though feta cheese isn’t specific to one particular Greek region and is made throughout the country with varying qualities.

The EU’s lexicological power grab could potentially apply to any food or beverage that was once identified with a place (think hamburger or frankfurter). U.S. trade officials say that acceding to the EU’s demand could force the removal and relabeling of a large number of products in U.S. stores at huge expense. Left unchecked, the EU’s push could also come to cover an almost infinite array of manufactured goods, such as Capri pants, Bermuda shorts, cuckoo clocks or Panama hats.

Until now, the U.S. and the EU have agreed to disagree on mutual recognition of geographical indications and have negotiated on a product-by-product basis. (The U.S. said yes to Roquefort and Champagne, no to fontina and mozzarella.) Now the EU is trying to impose its view of geographical indications in bilateral trade agreements, which could exclude U.S. products from markets where they have long been available. For example, the EU’s recent accord with South Korea contains a list of products, including asiago, gorgonzola and feta cheeses, which are mutually protected. The EU is also discussing a deal with Canada that could result in bans against 100 U.S.-made items.

Champagne Exception

Europe’s desire to protect valuable artisanship and regional traditions is understandable. The U.S. has agreed to numerous geographic indicators for wines and spirits, including Burgundy, Champagne, Chianti and Port. The EU protects Napa Valley wines, Washington State apples, Florida orange juice and Vidalia onions. Those specific agreements shouldn’t mean me-too producers can’t offer their wares, as long as they are clearly labeled.

The EU may have little to gain from its protectionist demands, anyway. Geographically marked products, it turns out, are selling well against generic competitors. The European Commission this week that worldwide sales of more than 4,000 products with geographic indicators totaled 54.3 billion euros ($83 billion) in 2010. They accounted for 15 percent of all EU food and drink exports. The U.S. is the biggest non-EU market, with 20 percent of geographically indicated exports. The report also found that the goods, on average, fetched more than twice the price of nondesignated products.

Clearly, Parmigiano-Reggiano and Roquefort can hold their own against foreign imitations.

    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.

    Before it's here, it's on the Bloomberg Terminal.