Business

Dcoop, Pompeian Under Fire for Deceptive Labeling

The Spanish cooperative is again in the headlines for its export practices to the United States and its members are becoming wary.

Aug. 1, 2018
By Daniel Dawson

Recent News

Spain’s largest olive oil coop­er­a­tive has come under fire for its “uneth­i­cal” export prac­tices for the second con­sec­u­tive month.

…we do not see some­thing praise­wor­thy or eth­i­cal to use the good name of olive oil, as can be seen on the label, when really the per­cent­age you have is min­i­mal.- Cristóbal Cano, UPS Jaén

Dcoop has been accused of sell­ing blends of rape­seed oil and olive oil in the United States as extra virgin olive oil, under its Pompeian brand. According to the labels of its OlivExtra Original, the prod­uct is com­posed of rape­seed oil and “First Cold Press Extra Virgin Oil,” which is printed in larger and more promi­nent text.

While the nutri­tional infor­ma­tion pro­vided to North American dis­trib­u­tors indi­cates that 85 per­cent of the blend is rape­seed oil, sources close to the matter have told media in Spain that less than one per­cent of the blend is actu­ally extra virgin olive oil. The remain­ing 99-plus per­cent, sources said, is Canadian rape­seed oil.

“Pompeian sells other sim­i­lar prod­ucts in the United States, in which it mixes rape­seed, grape seeds and extra virgin olive oil, always empha­siz­ing the image of olive oil as a com­mer­cial claim,” sources told El Español, the dig­i­tal news­pa­per that orig­i­nally broke the story.

These rev­e­la­tions come one month after the Spanish tax author­i­ties fined the coop­er­a­tive €2.81 mil­lion ($3.29 mil­lion) for fail­ing to pay import duties on Tunisian olive oil. Dcoop is cur­rently appeal­ing the fine. It was also revealed that the coop­er­a­tive was blend­ing this imported olive oil with its mem­bers’ oil before re-export­ing it to the United States labeled as Spanish extra virgin olive oil.

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A number of mem­bers of the coop­er­a­tive are now wary of Dcoop’s behav­ior and trade prac­tices with the United States, which they see as one of the most prof­itable mar­kets for their prod­uct. They worry that repeated abuses such as these will cause them to lose market share to other European Union and non-EU com­peti­tors.

“[A] good number of Spanish oil coop­er­a­tives, some of them inte­grated in the con­tro­ver­sial Dcoop coop­er­a­tive, are becom­ing more uncom­fort­able because of Dcoop’s strat­egy to banal­ize the Spanish prod­uct in the U.S. market, which is one of the most prof­itable,” sources said. “[Dcoop is] sell­ing brands that have a min­i­mum pro­por­tion of the orig­i­nal Spanish olive oil.”

However, Rafael Sánchez de Puerta, the vice-pres­i­dent of Dcoop, has hit back at these reports saying they have been stoked by jeal­ous com­peti­tors who have so far failed to get their foot in the door of the lucra­tive U.S. market.

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Dcoop cur­rently con­trols about 17 per­cent of the Spanish olive oil market in the U.S., with sales exceed­ing 30,000 tons last year. With these types of prac­tices, Dcoop also man­ages to keep its prices well below the rest of the market. Pompeian olive oil sells, on aver­age, at prices up to 40 per­cent lower than other Spanish and Italian brands and up to 100 per­cent lower than California olive oils.

Antonio Luque, the pres­i­dent of Dcoop, dou­bled down in defend­ing these low prices as well as deflect­ing the most recent crit­i­cism. He said that Dcoop was ded­i­cated to doing what is best for its mem­bers as well as Spanish extra virgin olive oil, as a whole.

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However, Cristóbal Cano, the gen­eral sec­re­tary of the Union of Small Farmers and Cattle Ranchers (UPA) in Jaén, vehe­mently dis­agrees. He said that prac­tices such as these do a “dis­ser­vice” to all parts of the Spanish olive oil sector work­ing to pro­mote its prod­ucts in the U.S.

“In our opin­ion, this is still a bad busi­ness prac­tice. We do not enter into the legal back­ground of the matter, because it is per­mis­si­ble to market mix­tures in the American market, but it is true that we do not see some­thing praise­wor­thy or eth­i­cal to use the good name of olive oil, as can be seen on the label, when really the per­cent­age you have is min­i­mal,” Cano said. “It could be clas­si­fied as adver­tis­ing that invites con­fu­sion and even mis­lead­ing.”

Meanwhile, there is the con­cern in the indus­try that the debate played out pub­licly in head­lines through­out Spain and beyond will lead to more con­sumer mis­trust.

“Stop pos­si­ble dubi­ous prac­tices and stop open accu­sa­tions,” the Spanish Association of Olive Oil Municipalities (AEMO) warned on its Facebook page. “Because if they do not do so, there will come a time when that other part of the sector, that strug­gles to com­mu­ni­cate to the world that extra virgin olive oil is unique, gas­tro­nomic and healthy…will also explode.”

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Posted by Asociación Española de Municipios del Olivo. AEMO on Wednesday, August 1, 2018