U.S. Launches Coordinated Strikes on E.U. Olive Oil Strongholds from Washington and Sacramento

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Opinion & Commentary

By Curtis Cord on September 25, 2013

U.S. Launches Coordinated Strikes on E.U. Olive Oil Strongholds from Washington and Sacramento | Olive Oil Times
California State Senator Lois Wolk and House Ways and Means Committee Chairman Dave Camp

It might not have been the offensive many were expecting over the past few weeks, though it was carefully targeted.

First, there was the release of a report on a year-long investigation by the United States International Trade Commission that some experts say will provide ample grounds for trade actions and formal WTO complaints against E.U. olive oils imported into the U.S.

And yesterday, California passed a law to create its own olive oil commission to conduct research, recommend standards, organize efforts to capture market share and otherwise wage war on low-quality imports.

The proximity of the two events might seem coincidental, but they are the results of an organized assault by a group of American producers and stakeholders now known as the American Olive OIl Producers Association (AOOPA), and their Australian allies.

Their roots go back to a Dixon, California meeting where growers drafted and discussed a domestic marketing order with the eventual aim of holding imports to higher standards.

Then, representatives from California and Georgia were successful in lobbying the powerful House Ways and Means Committee to request a USITC investigation into the “conditions of competition” faced by the fledgling American olive oil industry.

The December, 2012 hearing at the USITC in Washington was such a pile-on that Commissioner Shara L. Aranoff, a Maryland Democrat appointed by George W. Bush, said somberly, “I’m a bit afraid my children will find out what I’ve been feeding them all these years.”

At the hearing, Alexander Ott, then executive director of the new AOOPA, spent much of his five-minute allotment — and more time during direct questioning — stressing the nonexistence of any marketing order for olive oil: “There is no marketing order,” Ott stressed repeatedly throughout the day, adding “the hysteria over a potential federal marketing order is somewhat humorous.” (Ott is no longer with the association)

The mystical marketing order, however, found a way into the United States Farm Bill. California producers pushed for a provision that would have required imported oils to be subject to restrictions such as taste testing when a marketing order for olive oil is established. The California Olive Oil Council called the olive oil provision part of “a common sense program requiring imports to be held to the same standards as American olive oil.”

At around the same time, Lois Wolk — the Davis, California state senator and a Dixon attendee — was holding a hearing of her own in Sacramento before a packed room and an audience of hundreds who watched live via a webcast. Wolk’s newly-formed “State Senate Subcommittee on Olive Oil and Emerging Products” heard a procession of witnesses presenting their accounts of the challenges faced by the state’s olive oil producers who confronted, they said, unfair competition from unscrupulous European producers and importers who don’t play by the rules.

Wolk went on to garner bipartisan support for the bill signed into law yesterday that sanctioned the formation of the state commission that will use annual assessments, collected from producers who make over 5,000 gallons per year, to “enhance the competitiveness of the industry within the state, national, and international marketplace.”

But the big guns are in Washington, and lawmakers are expected to not let the estimated $2 million taxpayers spent on the USITC report be wasted. Such reports often result in formal complaints and trade actions including higher tariffs and import restrictions.

“I don’t think anyone can deny it has been a pretty bad couple of weeks for American importers and their European partners,” said an olive oil broker who wished not to be named.

Not surprisingly, the International Olive Council has had little to say about the latest offensive except to acknowledge the impressive effort that went into the USITC report, and to argue that some of the information it contained was debatable, though it didn’t say which.

No one is questioning one of the findings by the investigators: that the United States has no plans to join the Madrid-based IOC, citing government officials who confirmed an increasingly isolationist policy toward “U.S. membership in international commodity organizations.”

Like a U.N. Security Council paralyzed by a Russian veto, the U.N.-sanctioned International Olive Council is seen by American agencies as unlikely to further U.S. interests, with the mere five “participation shares” it would have, compared with Europe’s 684.

The Americans will not need to go it alone this time, however. Australian producers, and their fearless leader, Paul Miller, have waged a sustained campaign that has managed to push back imports using a new set of quality standards and conventional PR. Imports into Australia fell seven percent last year. Such a decline in American olive oil imports would amount to 22,000 tons — or almost three times what the U.S. produces — bringing a whole new meaning to the “Land of Oz.”

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This article was last updated August 4, 2014 - 9:12 AM (GMT-5)

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  • steven jenkins

    this is an outrage to those of us who do business with mediterranean olive oil millers and family businesses. these california democrats are costing us thousands-upon-thousands of dollars for independent lab tests, weeks-upon-weeks of container-load delays, and all of it in the name of extorting a bigger market share for california olive oil producers. should be some admission of shame from somebody.

    • julian

      Well, Dave Camp isn’t a democrat.

    • Oil Boy

      Back of the envelope calculation IN THE REPORT say maybe 2c per liter (quart). So who is fooling who on testing costs – scared the tests might find something amiss?

      • David

        Who says the tests are the right tests and done by qualified and independent laboratories. Dig a little deeper oil boy and you will find out that some small group of producers (who represent just a pinch in terms of global production of olive oil) are attempting to introduce tests that are unreliable and scientifically have been shown to be inappropriate for determining extra-virginity. And on top of this, to do any testing, the industry needs independent laboratories who have the skill and experience, but also who aren’t allied with local producers.It’s the tail wagging the dog right now.

        • Dick Dagger

          Actually the Diacylglycerols (DAG’s) test (presumably one of the your ‘unreliable and inappropriate’ tests) has had more supportive refereed scientific papers published on it than anything the IOC is proposing and over a much longer time (since the mid 1999′s) – and most of the research comes from European universities.

          The IOC was caught napping on quality measures, and they were caught out by small emerging producing countries that had equal scientific expertise. Much of what has happened since has been an exercise in saving face.

  • Leslie W.

    Interesting recap of a concerted effort to heap costs on businesses of all sizes, in the name of helping consumers. Why not just test imports randomly to ensure the meet existing standards?

  • Michael Grimm

    Something smells, well, rancid about all this.

  • David

    There are a lot of things that just don’t add up here. Firstly, how is it that America or Australia, both countries that are new and immature olive oil producers on a minute scale, are seeking to define standards for olive oil. Extra Virgin grade is well defined and has been for a long time. Within the range of what’s allowed, people should market their product. If America and Australia believe they have the most premium extra virgin, then they should market that, not attempt to restrict other extra virgin products in this segment. There are thousands of peoples livelihoods that have depended on this industry for decades…who are a few nasty American and Australia producers to unfairly destroy them by changing the rules for no good reason?
    Secondly, I don’t understand why Olive Oil Times articles about these issues are written with such obvious bias. Are the writers local American or Australian producers? Or friends? If OOT is going to make comments on a debate, then please provide balanced arguments. Don’t paint one side out to be inactive and pathetic and then spend the rest of your article stating the views of local producers as if they are facts.

  • http://www.bestoliveoil.ca/ Athan Gadanidis

    The American consumers in the end will have to pay higher prices for real EVOO from Europe or switch to cheaper oils. If only Europe had taken a similar strong stand against American made junk food and other mass produced food items imported with practically no nutritional value except for the “vitamin fortified” label – which is debatable whether it is really enriched or even digestible…and lets not even mention GMOs…

  • marco

    Isolationist is right. There is no effort by California to become members of the world olive oil community – and I don’t mean COI. They want only to close out and vilify imported – not to constructive dialog.

    • http://www.bestoliveoil.ca/ Athan Gadanidis

      In my view here in Europe, most EVOO sold in supermarkets is not EVOO. This is my experience and I will be conducting some tests on European EVOOs. This will prove once again the problem is not due to distance traveled and time spent in transport. The problem is they over produce and mix the old oils with the new for starters. Spain is the main culprit of over planting.

    • Dick Dagger

      If the US was to join the IOC it would get 5 votes out of a total of 650 odd (because the voting system is based on production not consumption). If you want them to join give them a reason to! As it stands, if they did, they would effectively be silenced under the IOC overarching policy of ‘harmonization’. The IOC needs to stop pretending to be an organization that is focused on consumers, and actually become one. Giving important consuming countries more than a token say would be a good place to start. I won’t hold my breath.

  • _P

    not a good place to start…. California… this time you got it wrong.
    Artificial import barriers is going to do very little for you…boycotting a large proportion of the Olive Oil supply into the US is just going to put into question the benefits of Olive Oil consumption and therefore lead local producers to a downward spiral

    • http://www.bestoliveoil.ca/ Athan Gadanidis

      I do not see how it will have a negative impact on local olive growers in America; they will gain a huge benefit. Most consumers would agree based on their own experience EVOO bought in supermarkets in the States and in Europe is lousy. The industry needs to raise their standards and perhaps create another well defined stricter standard for EVOO. Most EVOO sold is not EVOO lets not kid ourselves…

  • Dick Dagger

    I wonder how many people have actually read the Australian voluntary standards. The chemistry standards mimic those of the IOC except that two new tests were introduced. But even possibly the worst EVOO ever made, would comfortably meet the levels set for EVOO. Nearly all of the new standards relate to truth in labelling. In particular stating somewhere on the label that an olive oil has been refined (if it is a refined product), and not using the words pure or light (which only serve to confuse everyone). The standards are also voluntary and if accepted apply equally to AUS and EU producers alike.

    While imports of EVOO to AUS have been relatively static for some years, and EU producers have lost market share, it should be noted that the loss of market share started and picked up pace well before the introduction of the standard. In 2001 EU accounted for 99% of sales of EVOO in AUS. By 2009, 25% of market share had been taken by AUS producers and increasing. The standard was introduced in 2011.

    The loss of market share of EU oils coincided with the broader distribution in supermarkets of a higher quality domestic EVOO which was sold at a similar price. It’s economics 101. The big EU producers need to adapt to the entry of new bright eyed and highly sophisticated competition, If they don’t their market share will continue to fall.

    And finally, it is worth noting that there is NO import duty on EVOO entering Australia whether in bulk or bottled. Australia also has no production or storage subsidies. So as far as I can tell, the only restriction of trade is that of politely asking producers not to use certain words on labels (but only if they really don’t mind).

    • http://www.bestoliveoil.ca/ Athan Gadanidis

      Agreed! The Europeans need to adapt instead of being in denial of their own missteps, mistakes and mismanagement.

  • Paul Miller

    It’s not them and us.
    The problems with poor quality fraudulent olive oil in the marketplace and the pursuit of better methods of
    analysis and standards are not uniquely Australian (or American). The recent EC Workshop on Olive Oil Authentication heard from speakers about work over many years in Europe and elsewhere to address exactly these problems that occur everywhere olive oil is traded. Apart from the general research effort based around the Mediterranean, two particular efforts that were discussed at that meeting have been an inspiration to Australia’s subsequent and ongoing work on olive oil quality. In Germany the Official Institute of Oils and Fats Research worked hard early last decade to develop methods that are now in widespread use by retailers in northern Europe; one of the largest olive oil laboratories Eurofins routinely does thousands of analyses of olive oil based on the “DGF” methods providing valuable product quality knowledge for the trade. This work inspired Australian government and privates labs to do extensive research that underpins the Australian Standard for Olive Oils and Olive Pomace Oils AS5264-2011. In Canada what seems to be the most effective olive oil surveillance anywhere has been done by the Canadian Food Inspection Authority for many years. Quality producers worldwide can only hope that other countries follow the example of Canada’s vigilance and surveillance methods soon.

    With regard to the USITC report, the olive oil world should be grateful for this comprehensive analysis of the current situation for olive oil. The USITC report brings together a large amount of useful information on many aspects of the olive oil industry in one
    document including the complex flows of olive oil in trade. Australia was happy to contribute to the data collection along with producers worldwide and two experienced Australian experts testified at the USITC hearing about Australian research. Data collection is a big task and there are always inconsistencies in how
    industry data is reported from region to region but overall this report is a useful statistical snapshot of the status of the industry in 2013.

    The USITC report underscores the global nature of the problems facing the industry and provides context for what must be a global effort to overcome these problems in particular for the increasing number of high quality olive oil producers worldwide. With regard to the quality and authenticity issues highlighted in the report these were also the focus of the EC Workshop on Olive Oil Authentication.

    The analysis of the US olive oil market is instructive for those of us seeking to export there. The USITC econometric analysis found that olive oil prices for US produced extra virgin olive oils are not significantly affected by changes in the prices of imported extra virgin oils and vice versa. The report suggests that this reflects the stage of development of the US industry. The finding that US consumers will readily substitute lower grades of imported olive oil for imported extra virgin oils is also interesting. In Australia our research indicates that this is due to a lack of knowledge about quality with much consumer confusion created by the use of terms such as Pure, Light and Extra Lite on the front labels of olive oil products.

    Only time will tell, but experience with other products indicates that such reports may be the first stage in
    further considerations of trade regulations on imports into the USA. All olive oil producers looking to the US market will need to monitor any further developments.

    With regard to the possible development of revised standards in the USA and/or California there will need to be comprehensive research on the natural makeup and quality over time of olive oil grown in a range of climates in California and for that matter in other US states. There is a wide range of latitudes and climates to consider along with year to year variations. It requires resources and experience for laboratories to develop competence and accreditation in such work. If a California olive oil commission can provide funds for such work then this will benefit the olive industry
    generally.

    I repeat that the problem of olive oil quality and authenticity in the trade is a global problem. Portraying it as “them” and “us” is wrong. In fact it should be responsible producers everywhere along with relevant authorities and the supply chains who work together to resolve these issues. That is what I would like to see.

    Paul Miller, President, Australian Olive Association.

    • Gio

      This is of course a helpful comment but I find it not credible when you say it is not them and us while you and your California comrades have publicised many so called studies that target directly “imported” brands. Of course it is you and them. It is how the world works and you fool no one with the sheeps clothing.

      • http://www.bestoliveoil.ca/ Athan Gadanidis

        Perhaps the unscrupulous old world European evoo mafia need to be taught a lesson in authenticity. I am living in Greece and find it hard to find good EVOO in the supermarket. Many Greeks have given up on retail not only due to the high price but also due to the low quality; they buy direct from the olive growers. This all about the consumer after all. I sell EVOO but I also buy at the supermarkets for research purposes.. perhaps there is some self interest in us all; but there is also a big problem here. Focusing on the level of self interest of others does not make the problem go away.

        • virginia bk

          Could this be the fault of corporate bottlers who thrive on homogeneity over taste rather than producers? Many sources indicate that many
          Greeks and Italians have always bought their oil from known sources, no?

          • http://www.bestoliveoil.ca/ Athan Gadanidis

            Absolutely it is the middlemen that cause the problems with authenticity. I support the US clamping down and trying to protect the EVOO brand. Nothing wrong with protectionism. As a Greek exporter of EVOO, I welcome the challenge. Adulterated EVOO gives us all a bad name.

      • Dick Dagger

        The Australian Competition and Consumer Commission (the peak body representing consumer affairs in Australia) has prosecuted Australian producers. They have also been named and shamed on National Television – and who outed them? Yes the Australian Olive Association. And no, unlike in Europe where if you fiddle with a pathetic 1,000 litres you get the book thrown at you, and the press including the OOT runs headline stories on the ‘crackdown’. But if you fiddle with a few thousand tonnes then the fault, (invariably after a protracted official investigation), is blamed on bad storage by the retailers. AND the alleged perp gets a say in the findings.

  • Eduardo Pérez Maestro

    You are quite right Steven, we take very seriously our job and so far this year got 4 awards, including a silver medal at the NYIOOC.
    But as we all know there is still a lot of fraud in the Olive Oil sector including big Mediterranean companies from Italy, Greece and from my country, Spain.

    From Acecasa, Hellín.

  • Guest

    Sorry, but I see nothing wrong with this. EVOO fraud is a large acknowledged problem by Europeans themselves. The US wants to protect consumers in the US from fraud, which really is GOOD for European producers. A quality producer is not going to lose business to the next bottle on the shelf that also is labelled EVOO but costs less because it’s not real EVOO.

    It is essentially a trademark, DOC issue, and these steps will ensure that the EVOO designation is not diluted figuratively and literally.

    In European supermarkets ALL olive oil is labelled EVOO. How is this possible?? Where is the non-EVOO oil going? EVVO should represent the highest, rarest designation, yet it is the most common one.