Function

Geographical indications of origin serve a variety of different functions.

Protection against deception

Consumers must be confident that they are receiving what they want. If the label says "Bavarian beer", there must be Bavarian beer inside.

Showing the origin of a product and allowing consumers to make distinctions

These functions are inseparable, because naming an area of origin allows consumers to differentiate a product as local, regional, national, or international (made in Europe).

Quality function

Because of the wide range of products available, and the resultant difficulty in making a choice, an ever larger number of consumers associate the quality of a product with its place of origin. Usually consumers’ expectations of quality play a part when they make purchasing decisions. Taking this quality expectation into account, many producers are beginning to attach marks of approval, or quality labels, to their products. Usually this is organised by the association or federation of the manufactures concerned. For example, the members of "Herkunftsverband Thüringer und Eichsfelder Wurst und Fleisch e.V.", a manufacturers’ association, have designed their own mark of approval. By using it, the manufacturers of these Thuringian sausage specialities give a quality-related guarantee that they use raw materials of the best quality, traditional methods of manufacture and recipes, in-house and external inspections.

Advertising

Advertisers take advantage of the fact that a growing number of consumers associate a product’s quality with its place of origin. Increasingly, it is the place of origin, and no longer exclusively the product itself, that is used to attract potential customers. This conveys a very a high recognition value to consumers. Thus, old customers can be kept and new can be made.

Economic significance

Consumers’ growing quality consciousness and their higher expectations contribute to the steadily growing importance attached to geographical indications.
There is, therefore, a recognisable connection between the origin, the quality, the characteristics, and the price of a product.
Often, commerce under a geographical indication does not identify just a single company, but a number of producers, who all manufacture their products in a geographically limited area.

Examples of this are Spreewald gherkins, or champagne.