Varied impact of APIC’s seal of origin on handicraft business

The ‘Made in Bhutan Seal’ launched by Agency for Promotion of Indigenous Crafts (APIC) concept of ‘Seal of Origin’ for the handicraft sector have had varied impacts on the businesses of stakeholders.

While the seal have helped many handicraft outlets in the Craft Bazaar (CB) in Chubachu, Thimphu, some vendors said it made little difference. On the other hand, some handicraft shops in town expressed grievances as they were not awarded the seal of origin by APIC.

The benefits of the certification APIC officials said is that “ buyers are in a position to make an informed choice, acts as a marketing tool for craftsperson and its dealers, protect and promote genuine Bhutanese handicrafts and motivate Bhutanese artisans.”

Rinchen Choden of Pem Chophel handicrafts at the CB said, “There wasn’t much of an impact on sales despite being awarded the seal of origin as the sales turnover is more or less the same”.

Another vendor at the CB said tourists or buyers can tell if the products are authentic so the seal makes little difference. However, other handicraft shops in town said it will help them sell their products if they were awarded the seal of origin as well.

APIC officials said except for the craft bazaar vendors, other shops in town haven’t been awarded the seal since most products or materials are imported.

“None of them have applied yet and they will not qualify even if they apply,” said Chimi Palden of APIC. He explained that “they will not get it because some of them import handicraft products from Nepal and other countries in the region.”

Tenzin Nima of Dhekhang Handicrafts is one of many who said “we are bound to import a few products as we need to blend with the tourists’ demand for such products. And in any case we hardly produce any handicraft products in the country without imported materials”.

“Most handicraft shops including mine in town are authentic and are more than four decades old while APIC came into existence along with its rules in recent times,” he said.

Sonam Chezom, a handicraft shop owner in the capital also said designs and products demanded by customers are not available in the country and has to be imported.

However, APIC officials said there are certain exceptions in evaluation. “In certain cases, some materials are imported but if the product meets certain percentage of its authenticity, we can issue the seal for them as well. For instance a Thangka if manufactured here with imported materials, they qualify for the seal,” an APIC official said.

Non-profit organizations (NGOs) in the meantime said it would make a difference in their sales turnover if APIC issued the certificate for them as well.

Sithar Tshering of Dharma Arts and Crafts showroom said, “as a non- profit organization, we don’t lure tour guides with commissions nor provide any discount on purchases for tourists, so it would be great if we can avail the seal too”.

APIC officials claimed that the agency has awarded the seal to two NGOs who came forward and will do so for others as long as they meet the criteria.

The seal is open to craft producers, community groups, cooperatives, private businesses and agencies that produce commercial handicraft products, and are capable of maintaining adequate stock levels to fulfill sales orders.

However APIC officials said “there are just a handful of artisans or independent manufacturers and that too at a very small scale of business so till date we have issued the certificate only to retailers.”

Many vendors at the CB questioned the quality of the stickers provided by APIC. Sonam Lhamo of the CB was among many who said “some of it doesn’t even stick well on the products and even if it does, it doesn’t look original at all.”

Meanwhile APIC officials said “the stickers were issued as part of introduction of the license or seal. The retailers need to identify strategies on their own about how to tag or embed into their products.”

“Now we are calling for meeting soon to educate them on advertisement and marketing the seal as we received complaints that stickers are not sticking,” APIC officials said. “In the end again, how to market and advertise is up to them.”

With a budget of Nu 7mn, the 500 meter long Bhutanese Authentic Craft Bazaar, initiated by Lyonchhen and  jointly funded by UNDP and the government was opened for business in October last year and has 80 stalls.

One of the major all time concern that the CB vendors are faced with is the scarcity of tourist customers. This, the vendors said was because other handicraft shops in town are allowed to lure the tour guides with cuts and commissions for leading tourists to their shops while CB vendors are prohibited from such practices. Commission for each purchase can range from 15% to 20% of the total cost of a product.

APIC has launched ‘Made in Bhutan Seal’ under the concept of ‘Seal of Origin’ for the Bhutanese Handicraft Sector. The Department of Trade (DoT), Ministry of Economic Affairs (MoEA) who owns the Seal Logo has authorized APIC to use the Logo in the development and promotion of the crafts sector. The ‘Seal of Origin’/ ‘Made in Bhutan’ has been developed by the Department to authenticate wholly produced and/or substantially transformed products with required minimum value addition done within Bhutan to help improve marketing capacity and contribute towards building “Brand Bhutan”.

APIC has been established as an autonomous agency under MoEA and is responsible for the execution of crafts and related initiatives under the Accelerating Bhutan’s Socio-economic Development (ABSD) project. APIC is thus mandated with the task to promote crafts industry in the country and preserve the rich crafts culture and traditions.

The Agency is governed by the Board of Directors constituted with members from stakeholder agencies including the private sector.

Application Fees for availing the seal is Nu 2500 for entry processing & administrative costs for all zorig chhusum product lines and an annual nominal fee of Nu 300 is charged to the business license holder for holding the seal.

The Seal is for all Bhutanese arts and crafts and the seal logo cannot be used for the promotion of other products produced by the same producer if these products have not been awarded the seal. The awardees can produce different forms of seal on their products according to the standards provided by APIC.

A penalty of Nu 10,000 is charged as a fee for violation of the seal and informers of such violations shall be rewarded with Nu 3000.

Guidelines for the Seal of Origin states that the ‘SEAL of Origin’ is a benchmark for originality of the products, and it’s not a business license.

Economic affairs minister Lyonpo Khandu Wangchuk inaugurated the ‘Seal Logo’ as well as the APIC website on 14 May, 2012 at the Nehru Wangchuck Cultural Centre in Thimphu.