Brexit could chip away at protected food names

The recent news that Ayrshire New Potatoes (or “Ayrshire Earlies”) have been granted Protected Geographical Indication ("PGI”) status has been warmly received by a number of industry stakeholders. However, depending on the how and when the UK leaves the EU, the status of PGIs in the EU following Brexit remains materially uncertain. The benefits of PGIs are clear and careful consideration needs to be given to ensure there is no dilution of this protection following Brexit.

What is a PGI?

The PGI scheme covers regional and traditional foods whose authenticity and origin can be guaranteed and will only be granted where the EU decides that the product has a reputation, characteristics or qualities that are a result of the area it’s associated with. The effect of securing PGI status is that another producer of a similar product can’t call it by the same name unless it is (a) produced in the geographical area and (b) produced by using the approved methods, both of which have been agreed with the EU during the application process. In addition to the Ayrshire Early, there are 14 other Scottish food and drink products (including Scotch Whisky, Stornaway Black Pudding, Scotch Beef and the Arbroath Smokie) which have been granted PGI status by the EU.

Benefit of PGIs to the Food and Drink Industry

According to Scottish Development International figures, the food and drink industry is worth around £14 billion each year to the Scottish economy and accounts for one in five manufacturing jobs. It is believed Scotland has almost 19,000 food and drink businesses, which employ over 115,000 people. There are also ambitious targets to grow these figures to £30 billion by 2030.

Given the importance of this sector to the Scottish economy, the assurance of quality and provenance provided by the PGI scheme for Scottish products should not be underestimated and any steps to protect the identity and brand of Scottish food and drink products are to be welcomed.

PGI and other forms of relevant IP

The PGI status is essentially another form of intellectual property that requires to be protected. Whilst perhaps less well-renowned than more “traditional" forms of IP which may protect food and drink products such as trade marks (for a brand name), copyright (for a logo), designs (for the shape of a product or its packaging) or patents (for any inventive step used in the manufacturing process) the PGI offers yet another layer of protection to stop imitators from seeking to ride on the coattails of well-known brands/products. Additional protection may be available to food and drink brands who can seek the protection of slightly different forms of trade marks such as collective marks (which can only be used by a specific group of enterprises, e.g. members of an association) or certification marks (which are used to demonstrate compliance with defined standards, but are not confined to any membership body or organisation).

PGIs being misused

The protection of PGI status goods is provided by EU regulations. In summary, infringement of a PGI will occur if:

• There is any commercial use of a PGI in respect of products not covered by the PGI registration, where such products are the same as products registered under that name (e.g. potatoes being called“Ayrshire New Potatoes” when they are either not from Ayrshire and/or have not been produced in accordance with the approved methods provided to the EU) ;
• There is any misuse or imitation, even if the true origin of the products or services is indicated (e.g. black pudding being sold as “Glasgow black pudding in the style of Stornoway Black Pudding”);
• There is any other false or misleading indication as to the provenance, origin, nature or essential qualities of the product used on the inner or outer packaging or advertising material liable to convey a false impression as to its origin; and/or
• There is any other practice liable to mislead the consumer as to the true origin of the product.

In practice any infringement may well cover a number of these possible scenarios. In the event of an infringement of a Scottish PGI, court action can be taken against the infringer (most likely in the form of an interdict (the Scottish equivalent of an injunction)) to prevent further infringement together with the appropriate claims for financial relief (e.g. damages and legal costs). Equivalent court remedies are also available in the English and EU member state courts.

Brexit Implications

Given PGIs are currently legislated for at EU level, the question of where Scottish (and indeed UK) PGIs will sit, following Brexit, is one which has caused particular concern amongst the food and drink industry. As with all matters Brexit, there is uncertainty.

In the event of the UK leaving the EU with a negotiated deal, it is likely any such deal will simply allow for all current UK PGIs to continue to be protected in both the UK and EU (albeit probably under two different schemes). Likewise, current EU PGIs would likely continue to be protected in the UK under reciprocal arrangements.

If the UK were to leave without a deal, it is envisaged that the UK would set up its own scheme which would mirror the current EU regulations currently in place. The Department for Environment, Food and Rural Affairs ("DEFRA”) would manage the scheme, maintain the current register and process new applications. The good news is that as at the date of the UK’s withdrawal, all current UK PGIs will be protected under this new UK-wide scheme. This new UK scheme will be open to all producers, whether based in the UK, EU or beyond. So far so good.

However, in the event of a no deal Brexit, the protection on offer to both UK PGIs in the wider EU and EU PGIs in the UK (both presently protected under the current EU scheme) is unclear. Whilst the EU could simply grant all current UK PGIs automatic protection under the EU scheme (in which case DEFRA would likely reciprocate), it may be that all current holders of UK PGIs have to reapply for EU protection. Whilst DEFRA have offered support and guidance, this could well be a costly and time-consuming affair. In the event that re-applications are required, there may be a period where UK PGIs are unprotected in the EU (one would expect there may be a backlog in processing re-applications) as they await the application being granted. If this resulted in a period whereby Scottish/UK PGIs did not have protection in the EU, this could allow copycat imitators or products of a lesser quality to fill the void, until PGI protection is restored. Whilst the other forms of IP detailed above (e.g. trade marks etc) would likely still apply and offer protection against this, there is no doubt that the value of PGIs would be diminished.

Conclusion

The current PGI regime operated by the EU is extremely valuable to the food and drink industry in Scotland. It is clear that Government must do all they can to prevent any dilution of protection either in the UK or wider EU for food and drink products currently benefitting from PGIs.

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