Ethiopia is pursuing a novel proposal created by Lightyears IP (http://www.lightyearsip.net/ethiopiacoffee.shtml ) in which the government of Ethiopia would trademark geographic names. These being the Sidamo, Harar, and Yirgacheffe coffee growing regions. After doing so, the government of Ethiopia would set up a global network of licensed distributors. The licensed distributors working with the government would then help determine the retail price of Ethiopian coffee and direct some portion of their proceeds to advertise and market the superiority of Ethiopian coffee versus say Colombian coffee. The goal of all of this being higher prices for coffee and happier, healthier coffee farmers.
I believe this novel approach, which is strongly supported by OxFam, is unworkable and that it will have the unintended consequence of harming the Ethiopian coffee industry, reducing demand for Ethiopian coffee, and thus hurt already poor coffee farmers and their families. The road to hell is paved with good intentions.
Geographic names are not trademarked. In fact it is not typically even possible to do so. We squeeze Florida oranges not Florida™ oranges and drink Burgundy not Burgundy™. NYC Mayor Bloomberg should move quickly to trademark “Brooklyn” to prevent Domino’s from further disparaging its fine history with their horrid new pizza. But, he won’t because the idea is absurd. Alas, the whole world is free to make New York cheesecake.
The government of Ethiopia has not succeeded at providing running water in more than 50% of its villages nor at paving many roads nor at much of anything actually. The country is a basket case, a disaster. It is laughable to suggest that this government is now ready to take on the task of setting up and managing a worldwide network of anything. In any event, it has more pressing issues that it should be focused on.
The government of Ethiopia is good at buying weapons including tanks and fighter jets.
http://en.wikipedia.org/wiki/Military_of_Ethiopia
It is also good at jailing, torturing and killing its opponents. It is corrupt and perhaps very, very corrupt. http://www.amnestyusa.org/countries/ethiopia/document.do?id=ENGUSA20061116001 http://news.independent.co.uk/world/africa/article2251351.ece http://en.wikipedia.org/wiki/Ethiopian_police_massacre
This corrupt government will now be managing coffee export and distribution. It is not hard to imagine that some of these coffee earnings could then be converted into more tanks, bullets, and bombs. Given the long history of corruption and theft in Ethiopia and most of Africa (see Nigeria), it is much harder to imagine any of the additional coffee earnings actually making their way to poor farmers. It would be extremely naïve to believe this.
OxFam and LightyearsIP must have this all figured out? Well, call me a pessimist but I don’t see a bunch of well armed military guys taking orders from some grad students at OxFam, 5,000 miles away. Does OxFam have a Mig or tanks?
The Lightyears/Oxfam scheme also injects another layer of cost and overhead into Ethiopia’s coffee sales. Costs that will need to be recouped before farmers even have the potential to benefit.
From a coffee buyer’s perspective, the plan makes Ethiopian coffee more difficult to purchase and sell than other coffees. Buyers are asked to sign a lengthy, onerous trademark licensing agreement. This makes buying other coffee easier and more attractive. This places Ethiopia at a disadvantage in the marketplace which is likely to lead to lower demand and lower prices. Not a good outcome for farmers.
Instead of the complex, unworkable and potentially lethal Oxfam/Lightyears scheme, I think Ethiopia should follow the tested and traditional approach of geographic certification. Florida oranges, Burgundy wines, Napa Valley wines, and Colombian coffee all have producers’ co-operatives that insure these products actually are grown and produced in their stated geographies. The co-operatives then pool some of their resources to promote their products to try and increase demand and thus prices. Juan Valdez, the Colombian coffee dude, and his burro are the creation of one of these co-operatives. Oxfam is essentially saying that all of these large, well established, proven co-operatives are wrong. I say their sales and the demand for these products prove they are right. The livelihood of Ethiopian farmers will hang on the outcome of this bet.
Creating new customers for Ethiopian coffee rather than attacking existing customers is likely to generate incremental demand and higher prices. Neither McDonald’s, Proctor and Gamble, Dunkin Donuts nor Kraft purchase any coffee from Ethiopia. They could. However, if you are the CEO of McDonald’s and you see the no win situation that Starbucks now has with Ethiopia are you really going to want to leap into the fray? This dispute is repelling demand. That is not good for farmers.
But hey Bush and Cheney are lovin’ it. OxFam is promoting a scheme that will in effect funnel money to a Bush ally in the horn of Africa with the funds coming from well intentioned liberal do-gooders while simultaneously attacking one of the most liberal companies in America and harming a major contributor to the Democrats.
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The difference between the Ethiopian setup and the trade organizations Mr. Hamster discusses are (1) that the Ethiopian government is involved, and (2) that the location, Ethiopia, is being trademarked, and not a logo or other traditional mark.
I can't speak regarding the Ethiopian government's corruption and general mean-ness. Large Hamster is probably right that they're not nice people, and we shouldn't do business with any government outside the USA, Canada, and EU. [Except the USA's government is famous for condoning torture, so maybe just Canada and the EU.] I.e., the question of how to do business with people we consider to be unethical is a huge and thorny one, and not one that we're gonna resolve here on a blog comment thread.
Hamster's trademark claim is U.S.-centric. The EU has a long tradition of regional appellations, dating back to the Treaty of Madrid in 1981, if not earlier. When you buy a bottle of Champagne, there's no little (TM) on the bottle (I believe), but it is a registered appellation nonetheless, and you can be sure that if you call your sparkling wine Champagne and aren't in that region, then you'll get sued under trademark law.
So although the USA does not allow trademark-like protection of regional appellations, other parts of the world are very comfortable with them.
[By the way, Burgundy itself is not a controlled appellation, but most of its subregions are.]
As for the question of whether this is good for Ethiopian coffee sales, Ethiopia seems to think it is, and it's silly to think that just because there are more costs involved demand will fall to zero. Champagne seems to be doing OK, even though McDonald's is not a buyer. Ethiopia similarly has a brand name that is considered to be of high quality, and it is entirely sensible that they would seek to extract larger rents from that reputation.
There is essentially no difference between the registered appellation that you describe for Champagne and geographic certification in the US.
A wine store simply buys Champagne, marks it up and resells it. The store owner doesn't have to negotiate a trademark agreement with the governement of France to sell Champagne. If this was necessary, there would be very little Champagne sold in the US or anywhere else.
The trademark agreement is a significant and unprecendented obstacle to the purchase of Ethiopian coffee. It will result in lower sales and hungry farmers.
The involvement of a corrupt, murderous government is unlikely to be a benefit for farmers.
Yes you are right Champagne is doing fine without requiring merchants to sign a trademark licensing agreement. It is following the proven model of geographic certification.
Ethiopian farmers would benefit from following that model and from embracing not attacking their customers.
Ethiopia can of course pursue trademarks for geographic names if it chooses to do so. But this strategy is likely to hurt sales and harm farmers.
For what it is worth, Champagne is not trademarked in the US.
Here are some links.
http://www.uspto.gov/web/offices/com/speeches/stratplan2003apr03.htm
http://www.kplctv.com/Global/story.asp?S=6262738&nav=0nqx
http://www.uspto.gov/web/offices/com/speeches/03-21.htm
The EU issued a trademark for the phrase "aged five years" so they've got a lot intellectual credibility.
This is why I love the internet! An idiot like me can cobble together something based on some half-remembered NPR reports and a few websites, post it on a quasi-off-topic blog like http://swerl.blogspot.com (about adoption) and have much more thoughtful, knowledgeable people clarify and edify. Thanks!!!
For the record, my hazy (evidently incorrect) understanding was to do something akin to a controlled appellation -- something to PREVENT "new york style pizza" at places like Starbucks. (As a person who has lived in NYC and LA, I understand the HORROR. <- not kidding, seriously, it's a really really bad problem.) Not to be glib, but, I guess OxFam's reasoning is that premium coffee vendors are able to call whatever they want "premium" Ethiopian coffee. I think they INTEND (I'll suss the details later today) to do a "quality control" on what premium coffee joints are calling "gormet Ethiopian coffee". I mean, who's to say right now? Inside of the EU, evidently, you get smacked if you start peddling Two Buck Chuck as "champagne".
This seems better than the co-op advertising strategy (Having read extensively about Napa and how they pulled off their Paris Surprise, I know that model's pros and cons as well.) Somehow "Mmmm... drink Joe from Joe, the starving Ethiopian" isn't something I see Americans caring about. The forced-ignorance of Africa is one of the issues we face in the Ethiopian-Adoption community all the time. Even with Bono and Oprah dancing around, nobody really gives a crap.
The best thing is to FORGET McDonalds and focus on the huge upscale coffee market, and figure out the best way to get those premium dollars -- spent by educated consumers with sophisticated pallets (or idiots who like to view themselves that way, whatever) in the hands of the actual growers and not distributors, etc.
I got lots of angry Americans ready to agitate, but, as per my post, I'm really reluctant to advocate anything, as I remain a little ignorant about the actual details.
What's the solution if the status quo doesn't work and the proposed solution is problematic?
As for the government of Ethiopia, folks in glass houses, right? FBI overstepping unprecedented authority, hackable, paperless voting machines that go home with people, you know the litany.
Very interesting article. I do believe there is a history of regional trademarks....
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