Protected geographical indication recognition and willingness to pay: A case of grojec apple

Abstract

The Grojec region of Poland is an important region for apple production and accounts for 40 percent of domestic apple production. Apple growers from the region made an attempt to strengthen their competitive position through registering their apples as Protected Geographical Indication (PGI) products. The European Commission’s PGI allows food producers to obtain market recognition and a premium price for their products. Although the Grojec Apple received PGI registration in 2011, little has been done to promote apples with the PGI label. Two important research questions are addressed: 1) Does the Polish market recognize Grojec Apple PGI, and 2) Does the market value Grojec Apple PGI? Logit and regression models are estimated using survey data collected during an International MBA in Agribusiness and Commerce study week in Warsaw. Only 22% of consumers recognize Grojec Apple PGI. Yet, 70% of consumers indicate they are willing to pay more for the product and their average willingness to pay (WTP) premium is 32%. Results indicate use of the PGI label may be effective in improving sales and profit margins for Grojec Apple producers and their affiliated cooperatives. Older consumers are more likely to indicate a WTP premium. Males, smaller households, and consumers less sensitive to apple price indicate a higher WTP premium. An advertising campaign promoting Grojec Apple PGI as a better product may be effective at increasing consumer likelihood to pay more and WTP premium. Although “Grojec” is already familiar to most consumers in central Poland as a region for apples, a Grojec Apple with PGI label would assure consumers they are purchasing apples from the Grojec region and the apples are high quality.
 JEL Code: D12, Q13, Q18

Do Food Quality Schemes and Net Price Premiums Go Together?

“…Nevertheless, the lowest PP dispersion is observed among organic products, whereas within GI it is very high, especially for PGI. The findings showing a positive price premium are consistent with the results of numerous studies conducted at retail level which exhibit a consumer's willingness to pay (WTP) for organic food (Dimitri and Dettman, 2012;Maigné et al, 2017;Wier et al, 2008), PDO products (Fotopoulos and Krystallis, 2003;Garavaglia and Mariani, 2017;Panin et al, 2015) and PGI products (Ahrendsen and Majewski, 2017). This study demonstrates that this WTP is carried through all the supply chain, with significant PP at upstream and processing level, regardless of product categories.…”

“…Several studies mobilized purchasing records and surveys to determine consumers' WTP for PDO/PGI. Most of them dealt with a single product: Fotopoulos and Krystallis (2003) analysed the PDO Zagora apples in the Greek market; Ahrendsen and Majewski (2017) focused on the Protected Geographical Indication Recognition and the WTP for Grojec Apple; Garavaglia and Mariani (2017) analysed the case of PDO Dry-Cured Ham in Italy. In relation to organic products, Dimitri and Dettmann (2012) studied consumers' behaviour regarding three product categories (vegetable, fruit and milk).…”

Do Consumers Intend to Purchase the Food with Geographical Indication?

“…Consumers agree with the proposition that "products with GI contributes to the producer and the economy of the region" (3.95), "products with GI is more reliable" (3.68), "consume products with GI in the future" (3.66) and "products with GI is of higher quality" (3.64), respectively (Table 3). In the studies conducted, consumers found that geographically marked product were superior to others (Van Ittersum et al, 2000;Teuber, 2011;Vecchio and Annunziata, 2011;Verbeke et al, 2012;Likoudis et al, 2016;Kokthi et al, 2016;Ahrendsen and Majewski, 2017;Kos Skubic et al, 2018;Roselli et al, 2018;Dokuzlu et al, 2020;Lee et al, 2020;Lu and Saijiki, 2021).…”

“…A rising part of the population is concerned about food safety and quality and considers provenance to be a helpful quality indicator (Teuber, 2011). Consumers believe that products with GI have superior quality and taste compared to other products (Van Ittersum et al, 2000;Teuber, 2011;Vecchio and Annunziata, 2011;Verbeke et al, 2012;Meral and Şahin, 2013;Likoudis et al, 2016;Ahrendsen and Majewski, 2017;Kos Skubic et al, 2018;Roselli et al, 2018). The fact that products with GI inform consumers about the reliability, quality and origin of the product causes the consumers to increase the price they are willing to pay (Bramley et al, 2009;Vecchio and Annunziata, 2011;Aprile et al 2012;Deselnicu et al 2013;Lefèvre, 2014;Bishop and Barber, 2015;Lu and Sajiki, 2021;Zhang et al 2022).…”

Market Assessment of Pear Varieties in Serbia Using Fuzzy CRADIS and CRITIC Methods

“…Yeon et al [29] conducted an experiment with students in their acceptance of fresh apples, and came to the conclusion that students are willing to pay more for apples if they are bigger and crispier. Ahrendsen and Majewski [30] investigated how consumers accept apples from the Gorjec region in Poland. They proved that there would be better acceptance and greater willingness to pay a higher price for these apples if it were stated that they are protected geographical indication products.…”