One company alone controls 95 percent of olive oil bottling in the United Kingdom — a fact that may simplify the UK’s compliance with a new European Union olive oil testing regime.
That company — understood to be Edible Oils Ltd, part of the Princes group — is among members of the UK’s olive oil sector that have until tomorrow to respond to a UK government call for feedback on implementation of the new verification system.
From January, EU member states will each year have to conduct at least one conformity check — including chemical and taste tests — per thousand tons of olive oil marketed within them, to ensure the oil complies with its declared category.
They must also check that operators who carry olive oil up to the bottling stage comply with a new requirement to keep entry and withdrawal registers.
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The changes are part of the EU Olive Oil Action Plan and were provided for in recent amendments to the EU marketing standards for olive oil and were provided for in recent . The aim is to protect consumers from misdescribed and adulterated olive oil products.
UK believes 59 annual checks will suffice
Documents published by the UK Department for the Environment, Food and Rural Affairs (Defra), as part of its preparation to implement the new regime, contain interesting insights into both its practical application and the UK olive oil industry and market.
About 59,000 tons of olive oil is marketed each year in the UK so Defra proposes doing 59 annual conformity checks — the minimum in order to comply with the new law. However this will be subject to a risk analysis, as also required by the new EU law.
And though there are about 40 olive oil bottlers currently trading in the UK, as one accounts for 95 percent of the market by volume and the top four together cover more than 99 percent, Defra proposes inspecting just the four biggest bottlers plus four others, conducting a total of about 20 conformity checks.
About 15 retail establishments would also be visited and 39 conformity checks undertaken.
The UK considered applying a more rigorous enforcement regime but found no evidence to suggest it was warranted. “Any increase in the number of visits to bottlers would increase burdens on industry, including micro-businesses, and would not represent value for money,” Defra’s impact assessment says.
Costs and benefits
The UK estimates this annual sampling regime and operating an appeals procedure will cost it an average of about £108,517 ($175,000) annually after the first year. That includes outsourcing the olive oil sensory analysis as this must be carried out by an International Olive Council-recognized panel and there are no such panels in the UK.
The preliminary estimate of the overall cost to industry — including staff time spent hosting inspection visits, oil taken for conformity checks, and the updating of entry and withdrawal registers — is an annual average of £85,395 ($138,000).
But among the payoffs will be the provision of “verification and assurance for consumers on the reliability of information on the quality of olive oil marketed in the UK.”
The new regime will also “reduce the likelihood of potential fraudulent activity, thus avoiding unscrupulous operators gaining an economic benefit,” the impact assessment says.
“That benefit, if an operator were to adulterate their oil with 10 percent vegetable oil, is likely to be 15p (24c) per 500ml bottle. This is based on industry figures of the wholesale cost of extra virgin olive oil of £2 ($3.20) per 500ml and vegetable oil at 50p (81c) per 500ml.”
UK industry and market overview
The Defra documents also show that of the about 59,000 tons of olive oil marketed in the UK a year — all of which is imported — about 40 percent is believed to be used in processed products and the rest marketed as bottled oil.
Of the latter, about 15,000 tons is bottled abroad and 20,000 tons imported in bulk and bottled in the UK.
The value of retails sales of olive oil the UK in 2011 was £145 million ($234m), up from £140 million ($226m) in 2009, and the extra virgin category accounted for £82 ($132) million and £80 ($129) million respectively.
Defra said it had been advised by industry “that the normal mark up for retail sales is around 50 percent.”
The EU law requires member states to set appropriate penalties that are “effective, proportionate and dissuasive.” The UK plans to issue compliance notices in cases of breaches of the EU regulations. Failure to comply with a notice will be a criminal offense, as will be obstruction of inspectors, such as failure to provide a register on request.
Summary of feedback to be shared
The consultation period opened on October 25 and closes on November 22. Defra will later place a summary of all responses on its website.
Edible Oils declined a request from Olive Oil Times to share its views on the proposed scheme.