Abstract
This article addresses the issue of the profitability of Food Quality Scheme (FQS) products as compared to reference products, which are defined as analogous products without quality label. We approach this question by taking into account the level of the value chain (upstream, processing, and downstream), the sector (vegetal, animal, seafood) and the type of FQS (PGI, PDO, Organic). We collected original data for several products produced in selected European countries, as well as in Thailand and Vietnam. Comparisons depending on value chain level, sector and FQS are possible by using two comparable indicators: price premium and net price premium (including cost differential). The following principal conclusions were reached: 1) Price is higher for FQS products than for the reference products, regardless of the production level, the type of FQS or the sector; 2) Price premiums generated by FQS do not differ along the value chain, nor between sectors (vegetal, animal or seafood/fish); 3) Price premium for organic products is significantly higher than for PGI products, and this conclusion holds at upstream and processing levels, taking into account the costs directly related to production; 4) All organic products and almost all PDO and PGI products analysed benefit from a positive quality rent; 5) At upstream level and processing level, the relative weight of intermediate consumption in the cost structure is lower for organic products than for reference products.
Funding source: This project has received funding from the European Union’s Horizon 2020 research and innovation under grant agreement No 678024.
Acknowledgments
The authors would like to thank all the people and institutions who collected or provided raw data for this publication. Unfortunately, they are too numerous to be exhaustively listed here but they will hopefully recognize themselves through the list of data sources and the associated book. Statistical analysis was conducted using the Stata and R softwares.
List of available products.
| Case studied | Kind of product | FQS | Upstream | Processing | Downstream |
|---|---|---|---|---|---|
| Buon Ma Thuot coffee | Vegetal | PGI | Yes | Yes | Yes |
| Doi Chaang coffee | Vegetal | PGI | Yes | Yes | Yes |
| Gyulai sausage | Animal | PGI | No | Yes | Yes |
| Kastoria apple | Vegetal | PGI | Yes | Yes | No |
| Kaszubska Strawberry | Vegetal | PGI | Yes | No | No |
| Lofoten Stockfishÿ | Seafood | PGI | Yes | Yes | Yes |
| Sobrasada Porc Negre | Animal | PGI | Yes | Yes | No |
| Ternasco de Aragon | Animal | PGI | Yes | Yes | Yes |
| Thung Kula Rong-Hai H | Vegetal | PGI | Yes | Yes | Yes |
| Cornish cotted cream | Animal | PDO | Yes | Yes | Yes |
| Comte cheese | Animal | PDO | Yes | Yes | Yes |
| Dalmatian prusut | Animal | PDO | Yes | Yes | No |
| Kalocsai paprika | Vegetal | PDO | Yes | Yes | Yes |
| Opperdoezer Ronde potato | Vegetal | PDO | Yes | No | No |
| PDO olive oil | Vegetal | PDO | No | Yes | Yes |
| Parmigiano Reggiano | Animal | PDO | Yes | Yes | Yes |
| Phu Quoc Fish Sauce | Seafood | PDO | Yes | Yes | Yes |
| Saint-Michel bay mussels | Seafood | PDO | Yes | No | Yes |
| Zagora apple | Vegetal | PDO | Yes | Yes | No |
| Organic flour | Vegetal | Organic | Yes | Yes | Yes |
| Organic pasta | Vegetal | Organic | Yes | Yes | Yes |
| Organic pork | Animal | Organic | Yes | No | Yes |
| Organic raspberries | Vegetal | Organic | Yes | Yes | Yes |
| Organic rice | Vegetal | Organic | Yes | Yes | Yes |
| Organic salmon | Seafood | Organic | Yes | Yes | Yes |
| Organic tomatoes | Vegetal | Organic | Yes | Yes | Yes |
| Organic yoghurt | Animal | Organic | Yes | Yes | Yes |
| Total | 69 | 25 | 23 | 21 | |
Data sources and reference product.
| Case studied | Reference product |
|---|---|
| Buon Ma Thuot coffee | Non-PGI coffee from Dak Lak province in Vietnam |
| Doi Chaang coffee | Non-PGI coffee from the same province |
| Gyulai sausage | Non-PGI Hungarian sausage |
| Kastoria apple | Kissavos apples (non-GI apples from another region) |
| Kaszubska Strawberry | National average in Poland |
| Lofoten Stockfishÿ | Clipfish (cod) in Norway |
| Sobrasada Porc Negre | Non-PDO sobrasada in the region (Islas Baleares) |
| Ternasco de Aragon | Non-PGI lamb in the same region (Aragon) |
| Thung Kula Rong-Hai H | Non certified rice from the same region (90% of GI rice is organic as well) |
| Cornish cotted cream | Conventional cream in Great Britain |
| Comte cheese | PGI Emmental cheese produced in Central eastern French area |
| Dalmatian prusut | Local non-PGI firm |
| Kalocsai paprika | Imported Chinese pepper milled in Hungary |
| PDO olive oil | National average in Croatia |
| Opperdoezer Ronde potato | Regular potato in neighbouring IJsselmeerpolders region |
| Parmigiano Reggiano | Biraghi cheese (similar non-PDO cheese) |
| Phu Quoc Fish Sauce | Non-PDO fish sauce from same region |
| Saint-Michel bay mussels | National average for TSG Bouchot mussels |
| Zagora apple | Kissavos apples (non-GI apples from another region) |
| Organic flour | National average in France |
| Organic pasta | Simulated conventional farms with sample characteristics and conventionnal pasta facotry in Poland |
| Organic pork | National average in Germany |
| Organic raspberries | Conventional raspberries in Serbia |
| Organic rice | Non-organic rice in France (mostly PGI) |
| Organic salmon | Conventional salmon in Norway |
| Organic tomatoes | Conventional processed tomatoes in the same region (Emilia-Romagna) |
| Organic yoghurt | National average in Germany |
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