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South African Olive Oil Producers Seek Reforms

Apr. 30, 2013
Omeros Demetriou

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A new chap­ter in the South African olive oil saga is tak­ing shape with sev­eral major devel­op­ments promis­ing sig­nif­i­cant reform for the local indus­try.

According to SA Olive Chairman, Nick Wilkinson, our biggest prob­lem is imported adul­ter­ated olive oil which is fraud­u­lently labelled as extra vir­gin.” Not only does this oil cost less to pro­duce, but in some cases pro­duc­ers are paid a sub­sidy which amounts to as much as it costs a South African farmer to pro­duce one litre of oil.

According to the lat­est fig­ures from SA Olive, only 32 per­cent of the 7, 5 mil­lion litres con­sumed in 2012 was pro­duced locally. In the absence of work­ing reg­u­la­tions to expose adul­ter­ated oil passed off as extra vir­gin” and with­out a level play­ing field against imports sub­si­dized in their coun­try of ori­gin, smaller pro­duc­ers are find­ing it increas­ingly dif­fi­cult to com­pete on super­mar­ket shelves. By stock­ing our shelves with sub­si­dized and, in some cases, fraud­u­lently labelled prod­ucts, we are sup­port­ing for­eign com­pa­nies at the expense of our local pro­duc­ers and econ­omy,” Wilkinson said.

In an attempt to shield the country’s approx­i­mate 75 pro­duc­ers against the back­drop of cheap imports, the indus­try has applied to the International Trade Administration Commission (ITAC) for a Countervailing Duty to be intro­duced. Nick Wilkinson told Olive Oil Times the request, which was sub­mit­ted last year, is now in its final stages. The duty, which is cal­cu­lated accord­ing to the min­i­mum sub­sidy paid to farm­ers in the EU, is intended to place local pro­duc­ers on an even plat­form, with importers and allow the local indus­try to tap into grow­ing demand. As the Southern Hemisphere pre­pares for this year’s har­vest, a swift deci­sion on the mat­ter may offer some encour­age­ment for local farm­ers who are faced with the prospects of higher labor costs fol­low­ing two months of strikes, cul­mi­nat­ing in a wage increase of 52 per­cent per day (the cur­rent rate is €8.90).

Products fraud­u­lently labelled as extra vir­gin may soon find them­selves in con­tention under the recently enacted Consumer Protection Act (CPA). The indus­try is opti­mistic that such prod­ucts will be removed from super­mar­ket shelves with buy-in from local retail chains to favor com­pet­i­tively priced locally pro­duced prod­ucts,” accord­ing to Wilkinson. The act is expected to intro­duce greater trans­parency when it comes to the mis­lead­ing claims often asso­ci­ated with the dif­fer­ent clas­si­fi­ca­tions of olive oil and in doing so pro­tect con­sumers across the board from exploita­tion of any kind in the sup­ply chain.

One area receiv­ing par­tic­u­lar atten­tion is the restau­rant trade where olive oil pre­sented to con­sumers is often sub­sti­tuted with infe­rior prod­ucts. Ultimately, the true ben­e­fits for the local indus­try will depend on effec­tive enforce­ment and com­mit­ment from retail­ers, some of whom may value prof­its over a respon­si­bil­ity to offer qual­ity prod­ucts to con­sumers.

The issue received some much needed media atten­tion in September last year with the arrival of Tom Mueller who trav­elled to South Africa to pro­mote his new book, Extra Virginity. In addi­tion to meet­ing with sev­eral local pro­duc­ers and grow­ers in the Cape, Mueller was the key speaker at a Conference hosted by SA Olive. Along with Paul Muller, chair of the Extra Virgin Alliance (EVA), the event was aimed at address­ing the qual­ity issues faced by the local indus­try. Mueller — an avid sup­porter of qual­ity restora­tion — com­mended the work being done by SA Olive and sup­ported the country’s move to acquire mem­ber­ship to the EVA as a means of dif­fer­en­ti­at­ing itself from the dif­fer­ent qual­ity cat­e­gories of olive oil com­pet­ing on world super­mar­ket shelves. According to SA Olive’s Wilkinson, the align­ment with the EVA is cur­rently in its final stages. The move is con­sid­ered an impor­tant one for South Africa which pri­mar­ily pro­duces high qual­ity extra vir­gin olive oil.

In a bid to refine test­ing para­me­ters and ensure that the qual­ity of South African prod­ucts are on par with the high­est inter­na­tional spec­i­fi­ca­tions, SA Olive in con­junc­tion with the Department of Trade and Industry (DTI) and the South African Bureau of Standards (SABS) have embarked on a process to adopt the Australian Olive Oil Standard. This New World con­ver­gence, which implies more strin­gent qual­ity test­ing than is cur­rently endorsed by the International Olive Council (IOC), is con­sid­ered bet­ter suited to address the unique chal­lenges faced by the local indus­try.

Olive oil con­sump­tion in South Africa has increased by an aver­age of 20 per­cent per year dur­ing the last eight years. If farm­ers could expect to earn a fair price for their extra vir­gin olive oil, tap­ping into grow­ing local demand has the poten­tial to stim­u­late more than 50,000 new jobs for the econ­omy, accord­ing to SA Olive.

While the indus­try waits for the out­come on var­i­ous deci­sions, pro­duc­ers are turn­ing to inno­v­a­tive and prac­ti­cal means of pack­ag­ing their prod­ucts to dis­tract the consumer’s atten­tion from the plethora of imports on super­mar­ket shelves. Consumer edu­ca­tion will also prove piv­otal in reduc­ing the depen­dency on imports and ensur­ing that the local mar­ket con­tin­ues on this impres­sive growth path.

At the helm of this cause to inform the con­sumer about the ben­e­fits of using the real deal,” SA Olive will place the empha­sis on their cer­ti­fied Commitment to Compliance” label which assures the con­sumer that the con­tents are 100 per­cent extra vir­gin olive oil which has been chem­i­cally and organolep­ti­cally tested, with no defects.

References:

SA Olive web­site
Olive oil indus­try waits for import duty, Farmer’s Weekly, 8 March 2013
Emerging farm­ers hard­est hit by wage strikes, Farmer’s Weekly, 21 January 2013
Virgin Territory, Sunday Food, 14 October 2012
Call for olive oil’s anti-sub­sidy duty, Financial Mail, 3 September 2012

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