themselves from the big companies when constructing the meanings of reputation. In this regard, they correctly argue that reputation shapes an established part of stakeholder and responsibility discussions within the small business context. Moreover, their study shows that a good reputation is associated with trustworthy business behaviour.
2.3 The EU agri-food quality schemes
As next, trusting the idea that the entrepreneurs can utilise the EU quality schemes in branding, I specify the quality schemes at first in Picture 1 and compare then, some benefits and challenges of the system, summarised in Table 2. In terms of used logic in Table 2, some of the quality scheme benefits and challenges concern both Finland and Italy, and some just one or the other country, marked as ‘ symbol’.
To begin with, European Commission (2017) states that the logos of protected designation of origin (PDO), protected geographical indication (PGI) and traditional speciality guaranteed (TSG) illustrate authenticity of food in terms of the regional origin or traditional production (See Picture 1). In this regard, the logo of the PDO scheme (on the left side of Picture 1) symbolises that products are produced, processed and prepared in a certain geographical area, utilizing the recognised know-how of the local producers and using the ingredients from that specific region.
Furthermore, as far as this scheme is concerned, the product attributes must be connected to their geographical origin. Next, the PGI scheme logo (in the middle of Picture 1) illustrates the quality or reputation of the products that are connected to the place or region where they are produced, processed or prepared. However, within this scheme, the ingredients do not necessarily need to come from that geographical area. Lastly, the TSG scheme logo (on the right side of Picture 1) focuses on representing the traditional products, either in the composition or means of production, without a necessary link to a geographical area.
Picture 1. Protected designation of origin (PDO), protected geographical indication (PGI) and traditional speciality guaranteed (TSG) logos of the EU quality schemes
(European Commission 2018).
As it is summarised in Table 2, the quality scheme registrations are constantly growing and this offers possibilities for the food entrepreneurs to brand their registered foods through the quality schemes. In this regard, the biggest quality scheme groups are wines that are marked with the PDO or PGI logos and if solely the food products are considered, the biggest groups are vegetables, fruits and cheeses (Särkkä-Tirkkonen 2016, Finnish Food Safety Authority 2017).
Altogether, the quality scheme registrations cover 3 640 food and alcoholic products across Europe (European Commission 2018). In this respect, Qualivita Foundation (2017) states that PDO, PGI and TSG products have almost tripled their numbers from less than one thousand in 1996 to almost three thousand in 2016 (+197 %). Moreover, Chever, Renault, Renault and Romieu (2012) specify that the estimated worldwide sales value of PDO and PGI products was 54.3 billion euros at the wholesale stage in 2010.
The biggest numbers of the quality scheme registered products are in Italy, France, Spain, Greece, Portugal and Germany (Särkkä-Tirkkonen 2016; Finnish Food Safety Authority 2017).
In this respect, Särkkä-Tirkkonen (2016) says that some of those food products are known worldwide and the others just in that specific country where the product is protected by the quality scheme. In any case, she states that all these products are known and important, at least, in their own geographical area.
Table 2: Some benefits and challenges of the EU quality schemes in Finland and Italy.
Benefits of the quality schemes FIN IT Challenges of the quality schemes FIN IT Continuous growth of the registrations
(e.g. Qualivita Foundation 2017) Additional costs
(e.g. Hajdukiewicz 2014)
(Rosati 2016; Särkkä-Tirkkonen 2016) Possible limitations to the freedom
of competition (Mazzetti 2016)
The good news for the food entrepreneurs is that according to Tuusjärvi (2013) and Särkkä-Tirkkonen (2016) the quality schemes can protect the names of the food products from imitations, faking, frauds and counterfeits. Furthermore, they state that the system improves the traceability of the products. In this regard, the intellectual property rights determine that the quality scheme registered product names may only be used on the conditions presented in the product specifications included in the registrations (European Commission 2017; Finnish Food Safety Authority 2017).
Secondly, the food entrepreneurs can possibly set the higher product prices when using the quality schemes for their products. This is based on, for instance, Chever’s et al. (2012) study where they summarise that on average the GI products are sold 2.23 times as high as comparable non-GI products. Likiwise, Albayrak and Gunes (2010) argue that the EU consumers are willing to pay more when the food is traditional. However, additional costs might cause to the entrepreneurs when their foods are using the quality schemes. In this regard, Chever et al. (2012) correctly states that it does not mean that the companies using the quality scheme have in total 2.23 times higher margins. Hajdukiewicz (2014) explains this by clarifying that the quality scheme controls and marketing can cause additional costs and therefore, the entrepreneurs should continuously develop their own production in order to benefit most from the schemes.
Nevertheless, the challenge of the Finnish entrepreneurs is that they do not register their products under the schemes as much as they could. More specifically, the Finnish have ten food products, two liqueurs and one vodka are under the quality schemes. In contrast, the Italians have 968 quality scheme registered food products, wines and spirits. More specifically, the Italians have 635 wines, 295 foodstuffs, 37 spirits and one aromatized drink under the system. (European Commission 2018.) In this regard, Chever et al. (2012) study that the estimated worldwide sales value of PDO and PGI products was 365 million of the total sales value altogether in Finland and in the Baltic, Nordic and Benelux countries in 2010 (no single country-specific numbers).
Conversely, the same number was 11.806 million only in Italy in 2010.
Thus, Särkkä-Tirkkonen and Tuusjärvi (2014) take the view that the challenges of Finland are small outputs, which means that widening the circulation of the EU quality schemes is difficult.
Moreover, they say that the Finnish consumers lack possibilities to get to know the quality scheme products. Therefore, they suggest that the Finnish food products that have high production volumes should apply for the schemes.
Notwithstanding these Finnish challenges, Särkkä-Tirkkonen (2016) states that the Finnish food products could have the great background for narrative trust stories based on GIs. She demonstrates that the Finnish food production is totally a controlled process form the fields to the consumers’ tables. Moreover, the Finnish industry can use clean water directly from the Finnish water system and the cold climate is decreasing the use of pesticides. She deduces that these Finnish good practices could be advertised globally through the quality schemes. Moreover, she ponders that the schemes could even be the major contributors to the competitiveness of Finland in the future.
In any case, Särkkä-Tirkkonen (2016) admits that the Finnish have not been benefited enough from the quality schemes and the whole system has not been clear or known. For instance, the Finnish do not know that their berry and fruit liqueurs are on the same quality scheme list with French Cognac.
Despite the challenges that the Finnish meet with, Särkkä-Tirkkonen (2016) argues that Finland would have the top position among many foodstuffs because of the Northern geographical location. To demonstrate this, she states that it does not exist the EU quality schemes for wild berries. Furthermore, she says that this could be a good opportunity for Finland to brand itself through the premium quality of the wild products.
Conversely, as Table 2 illustrates, due to the success of the quality schemes in Italy, Mazzetti (2016) even ponders that the schemes could set some limitations to freedom of competition for the Italian companies and industries. In any case, he continues to state that this is not what seems to happen, since the Italian companies have based their success into these regulated rules. As an example, Qualivita Foundation (2017) states that the Italian food export revenue of PDO and PGI reached 3.1 billion euros in 2015 with the annual increase of 17 %, whereas the total export grew only 7,8 %.
In order to organise the growth of the quality schemes, the Italians have developed their own quality scheme system, from which the Italian entrepreneurs can benefit. According to Rosati (2016), the Italian system has been proved to represent a successful economic model with the public policies and democratic participation of the whole production chain through the network system, including reasoning about the protection and innovation strategies of the Italian food.
Finally, Rosati (2016) lists seven beneficial actors that have encouraged the Italian GI sector to grow: the large scale retail channel agreements, digital operator agreements, national promotion plan, ‘made in Italy’ promotion plan, company and consortium training, research and innovations. More specifically, he emphasises the GIs sector is an important part of the Italian agricultural and food economy that leverages the ‘made in’ concept. Altogether, the coordination and cohesion between these actors develop the Italian quality scheme system.