Yangcheng Lake hairy crabs, Zhangzhou bayberries, and Zhangqiu scallions: Why have China's geographical indication products collectively failed?

In the autumn of 2016, a consumer in Shanghai spent 580 yuan on a "Yangcheng Lake Hairy Crab Gift Box". After receiving it, the consumer felt that the crab's legs were thin. When asking the merchant, the merchant said, "Our crabs have drunk water in Yangcheng Lake, so they are Yangcheng Lake crabs."

The statement of "drunk water" left the consumer stunned.

During the Spring Festival in 2021, a grower of Zhangqiu Scallions said in an interview with the media, "The 'Zhangqiu Scallions' sold across the country cannot be produced in such large quantities in Zhangqiu in a year." The actual planting area of Zhangqiu Scallions is 120,000 mu, with an annual output of about 600 million kilograms. However, the amount of scallions in the market under the name of Zhangqiu far exceeds this figure.

In May 2026, the bayberry production area in Fugong Town, Longhai, Zhangzhou, Fujian was exposed:

The purchasing points generally soak bayberries in the prohibited preservative sodium dehydroacetate and a three - no sweetener with a sweetness 8000 times that of sucrose. An undercover journalist found that the workers handle thousands of catties of bayberries every day but never eat a single one themselves. Thousands of catties of bayberries flow out every day, and during the peak season, it exceeds 5000 catties. They are mainly sold to Zhejiang and Shanghai. After the incident fermented, compliant merchants in Wenzhou suffered a loss of over 300,000 yuan a day, and the largest fruit wholesale market in East China removed all Fujian bayberries from the shelves.

The three incidents belong to three categories: crabs, vegetables, and fruits. They are several years apart and are distributed in three provinces in the east, central, and south of China.

However, if we put the three stories together, we will find that their underlying structures are exactly the same.

This phenomenon is called the "tragedy of the collective reputation of geographical indication brands", and it has four elements. Understanding these four elements can help us understand why this kind of thing has happened repeatedly in the past decade and why it is difficult to completely solve.

Even if we remove the Zhangzhou bayberry incident from today, the main body of this article still holds - because this is not a story about bayberries, but a story about the structural failure of geographical indication brands.

First, understand what a "geographical indication" is and why it is naturally vulnerable

Geographical indication, simply put, is an "endorsement of the origin". This product comes from this place, and the natural conditions and cultural traditions of this place endow it with specific qualities.

The water quality in Yangcheng Lake raises hairy crabs with a specific taste; the soil and climate in Zhangqiu give birth to scallions that are tall, white, sweet, and crispy; the climate in Longhai, Zhangzhou makes the Fugong bayberries ripen earlier and taste sweeter than those in other production areas.

The value of geographical indication is based on the "scarcity of the origin": the aquaculture area in Yangcheng Lake is limited, the core production area in Zhangqiu is limited, and the early - ripening bayberries in Fugong Town are limited.

However, the problem is that once the scarcity forms a brand premium, it will attract a large number of people to "ride on the coattails" of this label, and the cost of doing so is extremely low.

The four - element framework: Why this tragedy is bound to repeat

The structure of the tragedy of the collective reputation of geographical indication brands can be summarized into four elements. If any one of them is missing, the crisis can be avoided; if all four elements exist simultaneously, the crisis is inevitable.

Element 1: Low certification threshold, and the cost of free - riding approaches zero

The certification of geographical indication essentially recognizes the "origin", rather than the "individual quality".

A crab farmer who raises crabs beside Yangcheng Lake and gets the crab tags can, in theory, sell the crabs under the name of "Yangcheng Lake Hairy Crabs" - regardless of the actual quality of these crabs. What's worse, there is the "bathing crab" model: crabs are raised elsewhere, transported to Yangcheng Lake for a few days of soaking, and can also be labeled with the crab tags.

As early as a report in 2018 by Beijing News, it was revealed that the real value of Yangcheng Lake Hairy Crabs at that time was about 300 million yuan, but the products sold under the name of "Yangcheng Lake" in the market reached about 30 billion yuan. That is to say, 99% of the "Yangcheng Lake Hairy Crabs" are not actually from Yangcheng Lake.

In this situation, the certification mark itself has lost the meaning of origin endorsement because the cost of free - riding is too low and the probability of being investigated and punished is too low.

Element 2: High regulatory cost, and the regulator is always at a disadvantage

Who is responsible for regulating geographical indications? The market supervision department, the agriculture and rural affairs department, and the local industry association often all have the power, but the boundaries of their responsibilities are blurred.

The more fundamental problem is the serious information asymmetry between the regulators and the violators.

The undercover journalist in Zhangzhou found that the illegal purchasing points would prepare several boxes of "clean samples" - bayberries that have not been soaked - in advance. Once the regulators come to check, they will take out these boxes to cope. This is not an accidental coping measure but an "open secret" in the production area.

The high regulatory cost and poor regulatory effect ultimately lead to the result that law - abiding people are at a competitive disadvantage because they have an additional cost but cannot get an extra market premium.

Element 3: High illegal gains, and individual rationality leads to collective irrationality

The core logic common to the three cases is the prisoner's dilemma.

Taking the Zhangzhou bayberries as an example, the early - ripening bayberries are naturally a bit sour, and it is difficult to sell them at a good price without treatment. If soaked in sweeteners, the bayberries will be sweeter, more beautiful, more popular among buyers, and bring higher profits. If one doesn't soak the bayberries while competitors do, the competitors can sell their products, while the law - abiding ones cannot.

In the undercover video, the person - in - charge of a purchasing point said, "Everyone is doing it. If you don't, you can't sell your products."

This sentence is the most accurate description of this structure. When illegal behavior becomes an industry practice, the cost of abiding by the rules is to be eliminated from the market.

This is not because "there are more bad people", but because the incentive structure is broken.

Element 4: Lack of a joint - punishment mechanism, and honest people pay for the violators

This is the most unfair element among the four.

After the incident is exposed, it is not only the violators who are punished, but the entire production area.

After the Zhangzhou incident fermented, the markets in Ningbo and Zhoushan launched special spot - checks on all bayberries from Fujian; the Jiaxing Fruit Market removed all Fujian bayberries from the shelves. The fruit farmers in Wenzhou who grow bayberries honestly and use no additives suffered a loss of over 300,000 yuan a day.

This is the core mechanism of the collective reputation tragedy. The violators erode the credibility of the entire geographical indication brand, and the honest people bear all the costs, while the violators have already made their money before the incident is exposed.

This structure objectively sends a signal to honest people - being a good person may not bring good rewards. Next time, honest people may also choose to "follow the crowd".

The last step of the tragedy is to force honest people to become accomplices of the violators.

Current situation: Three knowns and three unknowns about the Zhangzhou bayberry incident

Known: In May 2026, the Zhangzhou Market Supervision and Administration Bureau announced that 5 people were criminally detained in the bayberry incident, a 45 - day special rectification was launched, the main involved purchasing points were sealed up, and the problematic products were destroyed.

Known: The geographical indication brand of "Fugong Bayberries" has suffered serious damage, and compliant bayberries in Zhejiang have also been affected.

Known: After the special rectification ends, in the next bayberry peak season, the mechanism remains the same, the four elements remain the same, and the problem is likely to repeat.

Unknown: Can the 45 - day rectification form a normalized regulatory mechanism?

Unknown: Can the geographical indication certification system be upgraded to a more refined individual traceability mechanism?

Unknown: Can the production area establish an internal "integrity alliance" to enable compliant producers to obtain real premiums in the market?

The transfer value of the four - element framework

This framework is not only applicable to agricultural products.

Any "collective brand" may have the same four - element structure: low certification threshold, high regulatory cost, high illegal gains, and lack of joint - punishment.

The "985 students" label of Chinese educational institutions, the "reputation endorsement" of certain categories of Chinese - made products, and even the "graduated from a certain institution" in the scientific research field - all may follow the same trajectory.

How long a brand can last does not depend on how good it is, but on whether these four elements are effectively managed.

The four elements of the tragedy of the collective reputation of geographical indication brands: low certification threshold, the cost of free - riding approaching zero; high regulatory cost, honest people at a disadvantage; high illegal gains, the prisoner's dilemma driving collective immorality; lack of joint - punishment, honest people paying for the violators. When all four elements exist simultaneously, the crisis is bound to repeat.

This article is from the WeChat official account "BT Finance" (ID: btcjv1), author: BT Finance. Republished by 36Kr with authorization.