**1. Introduction**

The agrifood products market has never before contained as many niches as it does at this moment in history. One of those niches, in particular, has been around for thousands of years. However, it only gained official label status in the 18th century in the form of geographical indications (GIs). Official designations of this nature have their origins in Portugal, with Port wine, which had its production rules and characteristics established by the Marquis of Pombal who created a specific public company to deal with its case. In France, the pioneering Portuguese spirit was echoed years later by standardizing a protection system for agrifood products and wines based on characteristics arising from their places of origin. According to Barham (2003), GIs establish their differentiation of products on natural, human and historical factors. The sum of these three factors comprises what Allaire (2018, p. 63), based on the work of Goodman (2002), refers to as "the immaterialization of food and the institutionalization of quality", a concept that goes far beyond the specific soil and climate of a region capable of providing specific characteristics to certain products.

**Citation:** Fracarolli, Guilherme Silva. 2021. Mapping Online Geographical Indication: Agrifood Products on E-Commerce Shelves of Mercosur and the European Union. *Economies* 9: 84. https://doi.org/10.3390/ economies9020084

Academic Editor: Michał Roman

Received: 9 April 2021 Accepted: 20 May 2021 Published: 28 May 2021

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**Copyright:** © 2021 by the author. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

Although they date back thousands of years, this type of product has only recently gained official character under French, Portuguese and Italian legislation, among those with greater prominence. However, this market is too complex to be formed solely by the institutional factors. Ilbery and Kneafsey (1999) demonstrate that the niche market for local specialty food products (SFPs) is located in the intersection between producers and institutional and consumer networks. The point of intersection of all these networks of actors is in the arena of exchange. A significant number of works focus on the products or consumers. However, little attention has been given to the arena itself. For this reason, this work's importance is to shed light on the materialization of commerce in the arena of economic action and the differences between Mercosur and the European Union on this matter.

Works such as that by Kenney et al. (1989) and Bonanno and Constance (2001) show the neo-Fordist process by diffusion of a model based on mass consumption and production. This process resulted in an increasing homogenization of agriculture and food production worldwide. This fact is highly relevant in such a specific nature since GI labels intend to promote a more authentic and unique food (Broude 2005). This paradox could result from the structural impacts of a global consuming/production process in different countries due to its socio-economic position (Wallerstein 2011). How institutional policies affect these products' impacts on the final customers is crucial for understanding this market's functioning (Fracarolli 2021). Recent work suggests that this differentiation reflects on retail prices (Deselnicu et al. 2013). Additionally, GI can function as a relevant marketing tool (Agostino and Trivieri 2014; Dogan and Gokovali 2012; Lamarque and Lambin 2015; Mancini 2013; Teuber 2010). The market theory proposed by Allaire (2010), Fligstein (1996, 2008a, 2008b) and Fligstein and Dauter (2007) might answer some of these issues.

Over the last few years, many efforts were taken to encourage the market to provide alternatives with intrinsic food values. One known origin-related path is localized agrifood systems (Fernández-Zarza et al. 2021; Barham and Sylvander 2011). Many scholars have studied the strategy of trust-building through GI. However, Dias and Mendes (2018) show that, despite the growing number of published articles, most of them focus on southern European countries, are concentrated on four topics and are predominately empirical. Thus, there is a lack of literature comparing Mercosur and the EU, electronic commerce regarding such products, as well as multiple product market analysis, since most works focus on a single or a few products (Dias and Mendes 2018; Roselli et al. 2018; Teuber 2010; Renard 1999; Agostino and Trivieri 2014; Addor and Grazioli 2002). As such, the present work seeks to help fill the gap in the literature about this issue. Although this market has the same conformation structure globally, apparently, each region of the globe has a different proportion of each element. For example, the GI market in the European Union (EU) has reached incomparable numbers of registers compared to all other regions. In South America, on the other hand, the Southern Common Market (Mercosur) has an even greater area of production and a greater diversity of agrifood products. However, this diversity apparently has not developed in this specific market. To better understand this market's functioning, this work seeks to compare the difference between the performance of GI products and categories on this market exchange arena in Mercosur and the European Union by analyzing the e-retail supermarkets. To answer this question, this work understands that only a thorough investigation of this link in the market can provide the pieces of this complex puzzle. What are the characteristics of this market inin both blocs? What sort of goods do both markets address and sell? What are the commercialized products' origins in both blocs? Due to little comparative attention having been paid to the matter in terms of economic blocs, this work focuses on the market arena for GI products and its differences between Mercosur and the EU.

To answer that question, this initial research paper proposes to deepen the existing research by looking at the diversity of product offerings on the websites of significant retail supermarkets from selected countries of both the EU and Mercosur in a quantitative manner. The investigation considers e-retail supermarkets in Portugal, Spain, France, Italy, Germany, Greece and Poland on the European side. In addition, the research looks into e-retail supermarkets from Argentina, Brazil, Paraguay and Uruguay on the South American side. In the sections that follow, the work uses economic sociology to illuminate the market issue. Finally, both economic blocs' markets are analyzed to point out the differences between them on the practical effects of institutional support of Intellectual Property (IP) based on the data collected in the field.

By doing so, this work hopes to identify the practical functioning of the GI market in Mercosur and the EU's electronic supermarkets. Additionally, economic sociology theory is used with the intention to reveal corporate control issues, the embeddedness of the state and productive groups relation to this economic niche, and the market-driven strategy of promoting specific product categories.

The paper starts by presenting the formation of agrifood niches through the changing of food production–consumption logic due to globalization, followed by how economic sociology tries to explain market functioning through the theory of markets and institutional influence. Additionally, it develops the state of the art by bringing present considerations of the GI market into the findings on labeling efforts to decommodify it.

After this, it explains the methodology used for collecting data from available online supermarkets to characterize the products, the categories found and the origins of those products. Additionally, it graphically explains the phases of analysis followed in the present work.

Subsequently, the results found for the analyzed data are displayed, the graphic results are presented, and the major figures discovered relating to the collected material are described. This section is followed by a discussion of these results, including analyzing them, matching them to the existing economic sociology literature, and their implications on the market. Finally, the work ends with a summary of the developed work, its findings and suggestions for future works and policies towards market evolution.

#### **2. Agrifood Niche Pathway**

#### *2.1. Production Models*

Globalization is a comprehensive, widespread phenomenon with conceptual divergences. However, regardless of the possible interpretations, this phenomenon affects the relations between people and communities (Held and McGrew 2007) and implies the massification and standardization of consumer goods inherited from Fordism (Bonanno and Constance 2001). Thus, it has an effect on the process of inserting and marketing commodities in the global agenda. Simultaneously, producers of other types of agricultural goods need other productive arrangements to achieve success and remain in the market. This adaptation is vital for those on the periphery and semi-periphery of the world (Wallerstein 2011).

With this productive logic in force on the planet, agricultural producers seek to differentiate their products to meet demand by adding value resulting from territorial appreciation (Artêncio et al. 2019). However, as producers struggle as a result of globalization's impacts, consumers start to demand less standard or industrialized products due to food's mass production. This sort of demand is what Allaire and Sylvander (1997) call the "logic of quality" in opposition to a "productivist logic". This paradox impacts the change of the productive logic from scale to scope as it becomes impossible for certain rural actors to produce commodities and obtain gains by production volume.

Due to the intriguing effects produced in this adaptation of productive logic, most of the works investigating the GI market focused on how the producers address the economic aspects (Allaire 2010; Dervillé and Allaire 2014; Giovannucci et al. 2009; Menapace and Moschini 2012, 2014; Moschini et al. 2008; Swinnen 2010; Tregear et al. 2007). However, there is a scarcity of studies seeking to unveil the general effects of how institutional policies, mainly arising from IP, reflect product offerings and prices on retail markets. Nevertheless, this broad approach is necessary and capable of providing clues beyond the local individual cases addressed by much of the literature. Additionally, it presents

itself as necessary due to the recent increasing valorization of food quality, especially those relating to the origin and culture (Fernández-Zarza et al. 2021; Gocci and Luetge 2020). On this matter, culture plays a significant role through identity values imbued with the characterization of food, which are stated as a clash of tradition and global value chains (O'Brien and Cre¸tan 2019; Olofsson et al. 2021; Truninger and Sobral 2011).

Globalization is a process of production and consumption of goods that impacts each country in different ways. When it comes to agriculture, there is no difference. This process impacts the agri-food sector by severely industrializing goods by concentrating those products on food corporations and over logistics of massive production (Bonanno and Constance 2001; Renard 1999). As an effect of such a process, authors such as McMichael (1996) point out that communities must reposition themselves through niches to resist globalization's pressure. Furthermore, such a process demands local, regional and national identities to sustain culture-related food (Beriss 2019). Through this it becomes clear that globalization impacts nation states differently in terms of their global position and pushes the market towards niche formation to preserve culture-related agrifood products such as GI.

#### *2.2. Institutional Mechanism*

In the middle of this formatting process, the global system based on transnational trade, and the circulation of people and goods' circulation is continually increasing. However, price formation rarely results from an optimum trade between atomized buyers and sellers regulated by an invisible hand. Agrifood goods are no different. As pointed out by McMichael (1997, p. 630), "capitalist organization of agriculture is a political process, and is central to the dynamics of an evolving state system (including supra-statal institutions)."

The New Economic Sociology (NES) proposes the rejection of causal monism as an explanatory source of social causes. Granovetter (1985, 1990, 2018) proposes an embeddedness approach to economic action, an economically situated form of social action, and economic institutions as social constructions. The author resumes the association of economics and sociology approached by Weber, Polanyi and Durkheim. Thus, from the NES, a strand addresses institutions as abstract structures that act as social constructions, socially related to other social constructions, that operate economic actions (Abramovay 2000, 2004; Fligstein 2001; Smelser and Swedberg 2010; Steiner 2017).

In the sociological field, the Theory of Markets points out possible paths to forming and stabilizing this niche. Fligstein and McAdam (2012) sugges<sup>t</sup> that most social action occurs in "meso-level social orders" or fields. These fields are those in which the actors involved cooperate to create and stabilize a market. In the agrifood case, the detachment of market niches such as GI can obey similar cause and effect. By collaborating to cooperate and define the unique characteristics of their products, which, therefore, they need a different degree of protection, groups of producers or their representatives can create formal institutions. Such institutions then have a dialogue with the state. In turn, the latter can act by granting such differentiated treatment to a greater or lesser degree.

The construction of these institutions allows, through IP rights, the creation of a new, highly specialized, premium market, which has a reduced number of actors and is legally protected. Consequently, this newly created market is stabilized by legal devices designed and regulated by the state or suprastate entities. Thus, the theory developed by Fligstein (2002) does not restrict specific segments but offers a general conception of the varieties of capitalism resulting from globalization. This argumen<sup>t</sup> is analogous to that observed by Belletti et al. (2017) when attending to the relationships between goods with GI and private, collective and public interventions.

It is precisely in this new market for protected agrifood products that the intention is to examine the retail market's practical effects. Thus, the existence of institutions with a greater or lesser degree of strength may have an impact on their final commercial stage.

#### *2.3. Market Scenario*

Several works point out that premium agrifood products such as GI benefit from labeling, and the consequent price mark-up of them is the issue that collective producers look for when protecting this IP (Bureau and Valceschini 2003; Crespi and Marette 2003; Deselnicu et al. 2013; Chilla et al. 2020). Although the premium varies between products (Deselnicu et al. 2013), the effects of product offerings and the differences between both markets are objects of this work.

It is well-known that SFPs are more expensive than ordinary ones. However, recent findings show that consumers' willingness to pay for and preferences for SFPs show better results when based on trust and when studies are related to consumers rather than retail shops (Cacciolatti et al. 2015; Calvo-Porral and Jean-Pierre 2017; Giraud et al. 2005; Lamarque and Lambin 2015). Besides, there is little work in the comparative scope between Mercosur and the EU which may show the characteristics and mechanisms that make this market more functional. Such analysis of articles on the product categories or product origin is well developed on Dias and Mendes's (2018) work.

While in Europe, this market is consolidated and has a long regulatory history, it is still seen as a potential market in Latin America. However, with the signing of the broadest IP agreemen<sup>t</sup> in the 1990s, the Trade-Related Aspects of Intellectual Property Rights (TRIPS), it became clear that the development of protected brands and GIs is not limited to the normative aspect. Previous works point out GI as a strategy for rural development (Agarwal and Barone 2005; Agostino and Trivieri 2014; Barjolle et al. 2009; de Mattos Fagundes et al. 2012; Ilbery et al. 2001; Roselli et al. 2018). However, these works sugges<sup>t</sup> that other factors, such as commercial strategies, public policies and product qualification, play an influential role. In short, in commercial terms, agrifood products have the potential for commercial success for participants since they are linked to other strategies besides IP protection.

While some authors differentiate the GI market from other forms of certification and labeling (Galtier et al. 2008; Grote 2009; Laurent and Mallard 2020), others treat it analogously to other labels, such as organic labels (Aprile et al. 2012; Menapace et al. 2011; Roselli et al. 2018). The work of Galtier et al. (2008), for example, addresses GI as a label qualitatively different from other certifications in the case of coffee. The authors understand that other certifications are only the standardization of qualitative attributes. At the same time, GI would be a genuine manner capable of "decommodifying" the market due to the unique characteristics (Galtier et al. 2008) and also a way to strengthen the rural networks towards the development of smallholders (Oriana et al. 2021). The present work argues that IP's protective arrangements constitute institutions that create a new market and, therefore, allow different rules, which result in asymmetries concerning ordinary products.

In regional terms, just like the number of GI registrations, there is a predominance of works that address the European context in comparison to studies that consider Latin American countries. This scenario highlights the importance of addressing the theme, which is used worldwide, in comparative terms, to measure their differences. Likewise, the deepening of the retail market's effects in both the countries that make up Mercosur and the EU may show strategies used by producers and traders of products with GI to a greater or lesser degree of success. The economic blocs in question have built different agrarian models, which may or may not be part of the causal explanation of the proportionality of using this agrifood products market tool.
