As defined by WIPO, a geographical indication (GI) is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. In order to function as a GI, a sign must identify a product as originating in a given place. In addition, the qualities, characteristics or reputation of the product should be essentially due to the place of origin. Since the qualities depend on the geographical place of production, there is a clear link between the product and its original place of production. Similar to GI, European Union also protects Traditional Specialities Guaranteed (TSG), highlighting the traditional aspects of a product, such as traditional production methods or traditional composition, without being linked to a specific geographical area.
A study published by the European Commission, which collected the economic data from each of the 3,207 GI protected products from across the EU, found that GIs represent a sales value of €74.76 billion. The sales value of agricultural products and foodstuffs labelled as TSG were found to be worth €2.3 billion. Out of the 3,207 product names registered as either GI or TSG in 2017, 49% were wines, 43% agri-food products and 8% spirits drinks.
It concluded that the sales value of a product with a protected name is on average double that for similar products without a certification. This is due to the high quality and reputation of these products and a higher willingness of consumers to pay for authentic products. Example of GI include champagne, which is produced from grapes grown in the Champagne region of France.