Geographical indications in the wine industry: does it matter for South Africa?

Abstract

Purpose

This paper aims to assess the impact of protected geographical indications (GIs) on the trade performance of South Africa’s wine industry within the European Union (EU). This is critical in enhancing informed policy decisions towards securing more GIs for wines and other products. The unearthed evidence may provide a basis for more government interventions in support of the initiative while protecting the good reputation in communities where production occurs.

Design/methodology/approach

This paper uses the gravity flow model framework. The Rand value of wine exports was used as a trade performance measure whereas GIs data was extracted from the E-Bacchus database, and three proxies are used to capture the GIs variable.

Findings

GIs foster South Africa’s wine exports into the EU. When GIs were proxied as a dummy variable, results suggest that GIs led to about 170% increase in wine exports. However, when the actual number of GIs was used, the estimate also indicates 0.7% rise in exports, whereas using the difference between South Africa’s and the EU’s number of GIs, results suggest that GIs are associated with 87% increase in wine exports.

Research limitations/implications

This paper did not take into consideration protected designation of origins (PDOs) on the side of the Europe given that South Africa has no registered PDOs. Further research at industry level should be undertaken to ascertain whether some of South Africa’s wine meets the specifications required to register as a PDO.

Originality/value

This paper adds empirical evidence to the existing literature on the competitiveness of South Africa’s wine industry. The role of GIs in international markets remains a silent feature in the literature yet the industry exhibits an outstanding footprint in GIs. This paper, in part, responds to Biénabe and Marie-Vivien’s (2017) recognition for the need for interdisciplinary empirical analyses to better understand the GI concept. To the best of authors’ knowledge, this is the first paper to analyse the impact of GIs on the industry’s trade performance.

Citation

Lubinga, M.H., Ngqangweni, S., Van der Walt, S., Potelwa, Y., Nyhodo, B., Phaleng, L. and Ntshangase, T. (2021), "Geographical indications in the wine industry: does it matter for South Africa?", International Journal of Wine Business Research, Vol. 33 No. 1, pp. 47-59. https://doi.org/10.1108/IJWBR-06-2019-0041