` Adulterating Greek Olive Oil Will Not Boost Competitiveness - Olive Oil Times

Adulterating Greek Olive Oil Will Not Boost Competitiveness

Feb. 26, 2014
Elena Paravantes

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Recently the Greek gov­ern­ment through the Hellenic Competition Commission requested a report from the Organization for Economic Co-oper­a­tion and Development (OECD), an inter­na­tional eco­nomic orga­ni­za­tion founded in 1961 to stim­u­late eco­nomic progress and world trade.

The report was offi­cially launched in December of 2013 and included sev­eral rec­om­men­da­tions includ­ing the abol­ish­ment of obso­lete reg­u­la­tions.

While many rec­om­men­da­tions made sense, oth­ers did not. A par­tic­u­larly sig­nif­i­cant pro­posal was to abol­ish the pro­hi­bi­tion of pro­duc­tion of mix­tures of olive oils with other veg­etable oils within Greece. Currently in Greece, olive oil pro­duc­ers are not allowed to blend olive oil with other oils, such as soy­bean, corn, sun­flower or a com­bi­na­tion of these.

The OECD in an effort to limit reg­u­la­tory bar­ri­ers stated that the ben­e­fits for this action were clear. What are these alleged ben­e­fits?

According to the OECD allow­ing blended olive oils to be pro­duced in Greece would enable new sup­pli­ers to enter the mar­ket, thereby spurring com­pet­i­tive pres­sures (or some­times merely the threat thereof), lead­ing to prod­uct inno­va­tion, effi­ciency gains and poten­tially lower costs for man­u­fac­tur­ers and lower prices for con­sumers. The cur­rent pro­vi­sion pre­vents Greek pro­duc­ers from com­pet­ing in the domes­tic mar­ket against cheaper imported blended oils, they argued.

To make an even stronger case the OECD men­tioned that, even though Greece has the high­est con­sump­tion of olive oil per per­son in the world, this amount has dropped, and that other Mediterranean coun­tries such as Spain and Italy do not have this restric­tion and hence are more com­pet­i­tive.

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The rea­son­ing may sound log­i­cal at first, but it appears to be a generic pro­posal which is not sup­ported by any con­crete num­bers, nor does it take into account the rela­tion­ship of Greeks and olive oil.

Firstly, they men­tion that such a mea­sure may lead to poten­tially lower costs for man­u­fac­tur­ers and con­sumers but, as this would be the main rea­son for abol­ish­ing the pro­vi­sion, a maybe is not enough.

Olive oil in Greece is gen­er­ally cheaper than other coun­tries, will these new blends be cheaper? There is no evi­dence that they will be. Will new blended oils even be mar­keted as health­ier or inno­v­a­tive? Probably. We have seen how these oils are pro­moted in other coun­tries par­tic­u­larly in the US and UK.

We know that they are not in fact health­ier. Most stud­ies show­ing the heath ben­e­fits of olive oil involve extra vir­gin olive oil, not blends. And the most impor­tant ques­tion is: will Greek con­sumers buy them? This report has not taken into account the buy­ing and cook­ing habits of Greeks. Yes, luck­ily Greeks still have a high con­sump­tion olive oil, how­ever they do use other veg­etable oils for cer­tain cook­ing needs. But there is a clear dif­fer­en­ti­a­tion: olive oil or veg­etable oil, not a blend.

Another issue is the mat­ter of qual­ity. Greece is known for its small olive groves, high qual­ity olive oil, high per­cent­age of pro­duc­tion of extra vir­gin olive oil (as much as 80% of olive oil pro­duced is extra vir­gin, for Spain it is 30 per­cent and in Italy it accounts for about half.

According to a report by the U.S. International Trade Commission, Greek oils can be dif­fer­en­ti­ated from oth­ers because they have desir­able fla­vor pro­files and score well on chem­i­cal tests mea­sur­ing qual­ity. However very lit­tle Greek olive oil is exported as Greek. The major­ity of exported Greek olive oil goes to bot­tlers in Italy for blend­ing with olive oils from var­i­ous sources.

In fact, Greek olive oils are in high demand by bot­tlers for blend­ing with other extra vir­gin oils in order to raise the over­all qual­ity. In other words Greek olive oil is added to other oils to make them taste bet­ter. Greek olive oils are also con­sid­ered among the fruiti­est and most robust. This raises the impor­tant ques­tion: why would a coun­try that pro­duces high qual­ity olive oil not only in terms of taste but also health ben­e­fits, taint their prod­uct by adding var­i­ous ques­tion­able veg­etable oils?

The prob­lem Greece is hav­ing is that very lit­tle olive oil is exported as Greek. Only recently has there been a trend toward export­ing Greek olive oil with a Greek iden­tity. The steps are small but sig­nif­i­cant and that is where Greece may see the finan­cial ben­e­fits. Considering that Greece is the third-largest pro­ducer of olive oil in the world and only exports a tiny per­cent­age as Greek, the poten­tial ben­e­fit of exports is huge.

Yes, Spain and Italy allow blend­ing, but while they are also Mediterranean coun­tries with a rich olive oil cul­ture, they dif­fer in sev­eral ways. Olive oil in Greece was, and still is, used as the main type of cook­ing fat in the whole coun­try as opposed to Spain and Italy where the diet dif­fers greatly from south to north. Spain and Italy already have estab­lished iden­ti­ties for their olive oil brands. Greece does not, and allow­ing this blend­ing would in essence ruin any rep­u­ta­tion that Greek olive oil has estab­lished thus far and which is spread­ing thanks to the efforts of mostly small olive oil pro­duc­ers and pri­vate ini­tia­tives

Finally, it is impor­tant to note that the agen­cy’s rec­om­men­da­tion does not take into account the con­se­quences such a change may have to pub­lic health and the cul­tural and food iden­tity of Greeks. It is a known fact that Greece, along with other Mediterranean coun­tries, are show­ing lower adher­ence to their tra­di­tional Mediterranean diet. Greeks are adopt­ing a Western diet, con­sum­ing more food prod­ucts that are not local. Case in point: Greece has over 70 types of cheese, yet one of the best sell­ing cheeses in Greece, apart from feta, is an imported Dutch cheese. How does that ben­e­fit Greece finan­cially?

Luckily, the Greek gov­ern­ment is ini­tially say­ing no to the blended olive oil pro­posal, but that is not enough. The Greek gov­ern­ment needs to make it a pri­or­ity to pro­mote the devel­op­ment of a clear Greek food iden­tity not only out­side Greece but within Greece as well, and olive oil is a great place to start.


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