The Roles for Geographical Indication in Strategic Alliances of Small-Scale Food Processors: A Case Study of Natural Cheese in Japan

The purpose of this study is to clarify how Geographical Indication (GI) plays roles in strategic alliances of small-scale food processors. The study focuses on regionally typical natural cheese in Japan and two systems of GI, the local foundation's GI and the Japan GI of central government.

Dairy farming is one of the most important agricultural sectors in Japan, especially the northern area, but has faced difficult problems (e.g. unintended decrease in domestic production, tariff elimination in the foreseeable future) for the last one decade. On the other hand, high quality cheese manufactured by rural companies or dairy farmers has attracted much attention of consumers.

At the beginning, cheese producers tried to build the co-brand with the help of the local foundation's GI, the aims of which are to develop food sanitation management and identify a product's geographical origin. However, only a few relatively large processors have remained in the partnership because it could not give the majority clear economic benefits. In 2015, these large members organized the another strategic alliance in the form of joint maturing and bargaining of cheese on the Japan GI, deriving from EU's Protected Geographical Indication (PGI). This alliance has made it possible to stabilize product quality and prevent opportunity loss, as well as certify regional typicity of product. As a result, widespread types of producers in the region are joining it.

Directions for strategic alliances basically depend on GI selected by food processors, so it can be said that GI leads to smooth and well-ordered collective coordination among members joining a alliance. Successful alliances on GI strengthen small rural companies' competitive position in markets, and contribute to sustainable rural development.