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Geographical Indications for Sri Lankan products: The need to expand local registration

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Sri Lanka obtained its first-ever Geographical Indication (GI) certification on 02 February 2022 for ‘Ceylon Cinnamon’ from the European Union due to untiring efforts during the last nine years. Ceylon Cinnamon is now in the register of Protected Designations of Origin and Protected Geographical Indications (PGI) and it was published in the Official Journal of the European Union. Can we similarly market and protect distinctive Sri Lankan products such as Ceylon Tea, Ceylon Blue Sapphire, Ruhunu Curd, Dumbara Mats, Ambalangoda Masks and so on? Yes, marketing and protecting geographically unique products are possible by implementing a robust GI system with local registration to support obtaining international registration and protection.

What is a GI?

GI is a labelling system that identifies a product originating from a specific geographical area. It recognises qualities, characteristics, or the product’s reputation that are importantly linked or attributable to its location. The environmental and human factors in such areas help create a high-quality product. An Intellectual Property Right (IPR), GIs protect producers in the identified geographical location who meet the specific standards listed in the GI registration. More than 160 countries have already implemented GI systems for agriculture, handicrafts, food, and wine products. India, Thailand, Vietnam, Indonesia, and Cambodia are some of Sri Lanka’s Asian neighbours which enjoy GI’s economic and social benefits. For example, India introduced GI in 2003 and has registered nearly 400 products, of which more than 100 products are in agriculture. Thailand also introduced GIs in 2003, and by 2019, there were about 100 GI-protected products covering rice, vegetables, fruits, wine, and spirits.

Economic and Social Benefits of GIs

Both developed and developing countries have identified GIs as a potential tool to improve the agriculture and traditional handicrafts sectors by assuring the quality of the products. As in other forms IPRs, GIs also attempt to solve market failures such as information asymmetry. The economic benefits of GIs for producers are similar to the benefits of protecting trademarks and patents. It rewards producers from a geographical area and prevents outside producers who do not meet the production requirement from using such benefits.

Producers receive increased profits by obtaining a price premium for their geographically specific, high-quality products. Studies have shown that the price premium for GI products increase from 20% to 50% compared to non-GI products. For example, in the European Union (EU), the price of a GI product has been estimated to be 2.23 times higher than that of a comparable non-GI product (on average, 1.5 times more for agro-food products). As a policy instrument, GIs have positive implications for protecting indigenous knowledge and generating livelihoods and income for all stakeholders in the value chain. A strong GI eco-system will also attract new investments to the selected regions, thereby boosting the socio-economic development of rural areas. Thus, the country will gain several socio-economic benefits with a GI system.

GI in Sri Lanka: Slow Progress of Local Registration

According to Sri Lanka’s existing IP law, GIs can be protected in three methods. First, as a trademark law in the form of certification mark or a collective mark; second, as a mode of business practice which prevents unfair competition and provides consumer protection; and third, as a sui generis system – i.e. a system of its own. The World Trade Organization’s (WTOs), Trade-Related Intellectual Property Rights Agreement ( TRIPs) agreement does not impose any method and it is based on the country’s legal system. Some countries may have two or three protection systems, and there are pros and cons in each system. It is said that the sui generis system offers the most comprehensive protection for GIs. Internationally most of the countries that use sui generis protection system have a registration system where GIs are registered in a national registry governed by the national authorities.

Sri Lanka obtained certification marks for ‘Ceylon Tea’ in 2010 and ‘Ceylon Cinnamon’ in 2013 which provide local registration for these goods. However, Sri Lanka has not been able to expand local protection for several other similarly unique products yet due to several reasons. The absence of a national registry in the sui generis system and the costly nature of obtaining trademark protection, which require annual renewals, are among the most salient reasons. Added to this, the relevant authorities are not actively identifying potential products and encouraging stakeholders to protect their unique products. Furthermore, stakeholders, especially producers, are not aware of the GI system and there is no mechanism to support stakeholders to obtain local GI registration. The delay in local registration hinders the international registration as it is a prerequisite to go for international registration.

In 2018, as an initial step to create a national registry system for Sri Lanka, an amendment to the existing IP Act was introduced. The amendment confers power to the Minister to prescribe geographical indication in respect of any goods or products. However, as several legal and academic practitioners highlighted, the selection criteria, application procedure, and the modalities of how the GI is prescribed were not specified in the 2018 amendment. A new amendment on the GI registration system which introduces the procedure was tabled in the Parliament this year, the quick passage of which would be beneficial for Sri Lankan producers looking at securing GIs for their products.

Way Forward

A strong GI eco-system motivates all stakeholders in the value chain to protect the uniqueness of their products. This can significantly boost economic development. Therefore, Sri Lanka needs to swiftly pass the new amendment to the IP Act to enable the implantation of a local GI registration system. Equally, it is necessary to identify potential GI products with stakeholders’ support, encourage and build the capacity of relevant agencies for quality control, and encourage producers at the grassroots level to work towards securing GI certification. Further, it is essential to create a mechanism to link stakeholders with the relevant government agencies to obtain local registration initially and then go for international registration. Most importantly, creating awareness among all value chain actors is crucial as they are – finally – the intellectual property owners of their products.

Link to the full Talking Economics blog: https://www.ips.lk/talkingeconomics/2022/03/07/geographical-indications-gis-for-sri-lankan-products-the-need-to-expand-local-registration/

Dilani Hirimuthugodage is a Research Economist at IPS with research interests in Agriculture and Agribusiness Development, Environment, Natural Resources and Climate Change, and Intellectual Property. She holds a BA in Economics with a Second Class (Upper) and Masters in Economics (Distinction Pass) from the University of Colombo. In addition, she is a part-qualified candidate of CIMA-UK. (Talk with Dilani: dilani@ips.lk).

Piyumi Rasangi was a Project Intern at IPS’ Agriculture & Agribusiness Development team.



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Lanka inflation hit 70.2% in August

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Food prices climbed 84.6 percent, while prices of non-food items rose 57.1 percent in the crisis-hit island nation.

(Al Jazeera) Consumer inflation in Sri Lanka accelerated to 70.2 percent in August, the statistics department has said, as the island nation reels under its worst economic crisis in decades.The National Consumer Price Index (NCPI) rose 70.2 percent last month from a year earlier, after a 66.7 percent increase in July, the Department of Census and Statistics said in a statement on Wednesday.

Food prices climbed 84.6 percent, while prices of non-food items rose 57.1 percent in the tourism-dependent South Asian country of 22 million people.The Central Bank of Sri Lanka (CBSL) in August said the inflation rate would moderate after peaking at about 70 percent as the country’s economy slowed.

The NCPI captures broader retail price inflation and is released with a lag of 21 days every month.The more closely monitored Colombo Consumer Price Index (CCPI), released at the end of each month, rose 64.3 percent in August. It acts as a leading indicator for national prices and shows how inflation is evolving in Sri Lanka’s biggest city.

Sri Lanka’s economy shrank 8.4 percent in the quarter through June from a year ago in one of the steepest declines seen in a three-month period, amid fertiliser and fuel shortages.

“Inflation is expected to taper from September,” said Dimantha Mathew, head of research for Colombo-based investment firm First Capital. “However, inflation is only likely to moderate and reach single digits in the second half of 2023.”

An acute dollar shortage, caused by economic mismanagement and the effects of the COVID-19 pandemic, has left Sri Lanka struggling to pay for essential imports including food, fuel, fertiliser and medicine.

The country earlier this month reached a preliminary deal with the International Monetary Fund for a loan of about $2.9bn, contingent on it receiving financing assurances from official creditors and negotiations with private creditors.

India on Tuesday said it had begun talks with Sri Lanka on restructuring its debt and promised to support the crisis-hit neighbour mainly through long-term investments after providing nearly $4bn of financial aid.

The High Commission of India in Colombo said it held the first round of debt talks with Sri Lankan officials on September 16.

“The discussions held in a cordial atmosphere symbolise India’s support to early conclusion and approval of a suitable IMF programme for Sri Lanka,” the High Commission said.

Sri Lanka will make a presentation to its international creditors on Friday, laying out the full extent of its economic troubles and plans for a debt restructuring.

The Indian High Commission also said New Delhi would continue to support Colombo “in all possible ways, in particular by promoting long-term investments from India in key economic sectors”.

India’s support to Sri Lanka this year has included a $400m currency swap, a $1bn credit line for essential goods and a $500m line for fuel. In addition, India has also deferred payment on Sri Lankan imports of about $1.2bn and given a credit line of $55m for fertiliser imports.

The High Commission said India had continuing development projects worth about $3.5bn in Sri Lanka, whose president earlier this month asked his officials to resolve obstacles to projects backed by India. He did not specify the obstacles or the projects.

President Ranil Wickremesinghe has said Sri Lanka will turn a free trade agreement with India into a comprehensive economic and technological partnership.

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Raigam Wayamba Salterns Group turnover tops 1 bn

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Raigam Wayamba Salterns PLC saw its group turnover increase from Rs. 959.6 million to Rs. 1,147 million recording a growth rate of 19.5% year on year.Despite the fact that the financial year 2021/2022 was filled with many challenges, as a result of prudent management practices implemented and followed, the Raigam Wayamba Group was capable of reporting its ever-highest growth in 2021/2022,” said Chairman, Raigam Group, Dr. Ravi Liyanage.

Raigam Wayamba Salterns PLC, which was listed in the Colombo Stock Exchange (CSE) in 2010 is the front line player in the value added salt market in Sri Lanka and it supplies a range of consumer salt products under the popular brands “Isi”, “Ruchi”, “Welcome” and “Triple Washed” as well as various salt products used as an input for different industries in bulk form.All the consumer products of Raigam Wayamba Salters are SLS certified for its quality and consistency and the processes are ISO certified.’8

The Raigam Wayamba Salterns Group is equipped with salterns, salt refineries and processing plants located in Puttalam and Hambantota districts. In addition to that the raw material supply for these operations has been ensured by the 1,800 Acre saltern established in Kuchchaweli in Trincomalee District by the parent company of the Raigam Group. Further the Puttalam Salt Limited (one of the successor to the National Salt Corporation) is also an associate company of the Raigam Group.

The well-known Raigam brand and state of the art island wide distribution network are distinct strengths of the Raigam Group. The Raigam distribution network operates on a latest IT platform and also includes distribution channels for modern trade, industry and bakery sectors.

Sri Lanka’s economy which was under-performed for two years due to COVID pandemic situation was experiencing the impacts of the foreign exchange crisis in the latter part of the financial year 2021/2022. Despite the fact that the financial year 2021/2022 was filled with many challenges, as a result of prudent management practices implemented and followed, the Raigam Waymba Group was capable of reporting its ever-highest growth in 2021/2022.

The group turnover increased from Rs. 959.6 million to Rs. 1,147 million recording a growth rate of 19.5% Y to Y. At the same time the Profit after Tax grew from Rs. 149.7 million to Rs. 215.6 million at an annual growth rate of 44%. As a result of these successful financial performances the Earning Per share for the year stood at Rs. 0.76 compared to Rs. 0.53 in the corresponding year. This has made a significant impact on the value of the shareholders’ investment increasing the Net Asset Value Per Share form Rs. 5.06 to Rs. 5.74.

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Singer’s legendry sewing industry and Academies developing skills and entrepreneurship in Sri Lanka

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A name synonymous with Singer (Sri Lanka), Singer sewing machine has over the years become an indispensable product at local households, helping thousands of women and men to make a living through a sewing business. For over six decades, Singer has been manufacturing its trademark sewing machines in Sri Lanka. Singer brand has claimed many firsts in sewing machine innovations including the world’s first zig-zag machine and the first electronic sewing machine.

Singer Industries, a subsidiary of Singer (Sri Lanka) manufactures traditional, portable and digital sewing machines at a fully-fledged facility, where it provides direct employment for over 100 factory workers and accommodates around 150 service agents. The traditional sewing machines are of two variants such as the straight stich and the zig-zag sewing machine, while the portable and digital sewing machines cater to the modern customers. Singer Industries is mandated with assembly of sewing machines and manufacturing of cabinets and stands for sewing machines.

The sewing machine stands and cabinets are 100% locally manufactured with the help of local suppliers who also depend from sewing machine manufacturing. Singer Industries also consists of a strong R&D section for sewing machine innovations. All the sewing machines produced by Singer Industries are distributed by its parent company, Singer (Sri Lanka) through their 431 distribution touch points. Currently, Singer sustains its dominance as the market leader for domestic sewing machine industry with a market share of 85%. Among the facilities, Singer Industries provides to its customers, it has deployed special service technicians at island wide service centres for technical assistance and support related to sewing machines. Its YouTube channel has access to over 130 technical assistance videos to further support its valued customers.

The name ‘’Singer’’ is closely associated with sewing. One of its major contributions to the local sewing industry is the Singer Fashion Academy. For more than 60 years, the Academy has helped thousands of individuals to develop sewing skills and become entrepreneurs. The Fashion Academy conducts sewing courses and diplomas while a degree pathway is to be implemented soon to further support students. The Academy is also the first and only institute in the country to receive course validation status from the Chartered Society of Designers (CSD) in the UK.

As of today, the academy consists of 54 branches Island wide and offers 22 sewing courses, 2 diplomas and another 10 courses as part of its Diwi Saviya program for low-income families. Annually, over 5000 – 6000 students get enrolled in Singer Fashion Academy’s courses. In addition to the physical classes, the academy conducts online courses and also provides a recorded version of lessons to further facilitate students. During the last decade, over 60,000 students have successfully completed the Fashion Academy’s courses and some of these students have already started their own sewing businesses. The Fashion Academy has helped in developing the passion of sewing among Sri Lankans and as a result, sewing has become a hobby among many.

Sewing can be considered one of the most feasible self-employment opportunities with its potential to generate a good income. A business of one’s own is a luxury at present due to current economic crisis. Many individuals who started their sewing businesses from scratch have developed their businesses to highly profitable ones. Singer Fashion Academy has all the resources ready to help develop sewing skills and is committed to develop a skilled workforce for the betterment of the country.

(Company news release)

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