Costs and Benefits of Protecting Geographical Indications: Some Lessons from the French Wine Sector

The current crisis in the French wine sector is partly due to the complexity and restrictiveness of the system used to protect geographical indications (GIs). On the demand side, even French consumers are confused by the three-tiered GI system with 450 appellations d’origine contrôlées (AOCs) and 140 vins de pays (VDPs); France’s falling export share suggests that the rest of the world is positively baffled. Meanwhile, GI regulations restrict winemakers’ ability to respond to changes in technology and consumer preferences—inciting some of them to produce VDPs on AOC-protected land, in order to have greater liberty in terms of production methods. Before extending GI protection to other sectors—or strengthening it for wines and spirits—WTO Members should undertake cost-benefit analysis on a national basis, covering both static and dynamic aspects. The French wine experience has much that can inform such a process.