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Geographical Indication (GI) in the wine industry: Does it matter?

Author

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  • Lubinga, H. Moses
  • Ngqangweni, Simphiwe
  • Nyhodo, Bonani
  • Potelwa, X. Yolanda
  • van der Walt, Stephanie
  • Phaleng, Lucius
  • Ntshangase, Thandeka

Abstract

Despite the increasing competitiveness of South Africa’s wine industry globally and the industry’s outstanding number of geographical indications (GIs), the impact of these GIs on wine exports has not been assessed (and if it has been assessed such work is not publicly available or not seen by the authors). Understanding the impact of the GIs is critical in enhancing informed policy decisions towards securing more geographical indicators for wines and other products. In addition, the unearthed evidence may be the basis for more government interventions in support of the initiative while protecting the good reputation in communities where production occurs. Based on E-Bacchus database for GI, we use the gravity flow model framework to empirically analyse the effect of GI on South Africa’s wine exports to the European Union (EU). Three proxies are used to capture the impact of GI. Results suggest that GI fosters South Africa’s wine exports into the EU irrespective of the proxy used. With respect to the dummies, GI leads to an increase in South Africa’s wine exports by about 170 percent (0.169, p<0.1). When the actual number of GI names was used, the estimated coefficient (0.007, p<0.1) also suggests that GI enhances wine exports into the EU by 0.7 percent. While using the difference between the number of GI names for South Africa and EU, findings show that GI is associated with 87 percent increase in wine exports. Conclusively, GI positively impact on South Africa’s wine exports into the EU.

Suggested Citation

  • Lubinga, H. Moses & Ngqangweni, Simphiwe & Nyhodo, Bonani & Potelwa, X. Yolanda & van der Walt, Stephanie & Phaleng, Lucius & Ntshangase, Thandeka, 2017. "Geographical Indication (GI) in the wine industry: Does it matter?," NAMC Publications 262912, National Agricultural Marketing Council.
    • Handle: RePEc:ags:zanamc:262912
    DOI: 10.22004/ag.econ.262912
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    References listed on IDEAS

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