` USITC Holds Hearing on Olive Oil Market Investigation

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USITC Holds Hearing on Olive Oil Market Conditions

Dec. 6, 2012
By Curtis Cord

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John Sessler (left), chair­man of the Amer­i­can Olive Oil Asso­ci­a­tion, pre­pared to tes­tify Wednes­day at the United States Inter­na­tional Trade Com­mis­sion in Wash­ing­ton

The United States Inter­na­tional Trade Com­mis­sion held a pub­lic hear­ing in Wash­ing­ton, D.C. Wednes­day, part of an inves­ti­ga­tion into the con­di­tions of com­pe­ti­tion between Amer­i­can olive oil pro­duc­ers and major for­eign sup­pli­ers.

Fac­ing the com­mis­sion­ers, who are appointed by the U.S. Pres­i­dent for nine-year, over­lap­ping terms, twenty wit­nesses includ­ing pro­duc­ers, chemists and importers tes­ti­fied on mat­ters rang­ing from sub­si­dies and tar­iffs to olive oil qual­ity and fraud.

Exec­u­tives from the largest Amer­i­can olive oil pro­ducer, Cal­i­for­nia Olive Ranch, began the pro­ceed­ings by describ­ing how the world’s largest export mar­ket for olive oil has been an unreg­u­lated mess, with uneth­i­cal for­eign pro­duc­ers reg­u­larly under­cut­ting domes­tic sup­pli­ers with sub­stan­dard prod­ucts.

Sub­stan­tial Euro­pean gov­ern­ment sub­si­dies, inef­fec­tual qual­ity stan­dards, com­bined with ram­pant fraud and mis­la­bel­ing have pre­vented the U.S. olive oil indus­try from real­iz­ing its poten­tial,” said Cal­i­for­nia Olive Ranch Vice Pres­i­dent Adam Engle­hart.

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Author Tom Mueller, whose 2011 Extra Vir­gin­ity: The Sub­lime and Scan­dalous World of Olive Oil” described a cul­ture of fraud in the olive oil world dat­ing back to antiq­uity, placed much of the blame with U.S. author­i­ties” who have failed to enforce exist­ing rules and, repeat­ing charges made in his book, cer­tain inter­na­tional olive oil orga­ni­za­tions” for pro­tect­ing shady prac­tices by pre­serv­ing the sta­tus quo.

Through­out the tes­ti­monies the com­mis­sion­ers lis­tened atten­tively to the wit­nesses and asked ques­tions. Before ques­tion­ing the first panel, Com­mis­sioner Shara L. Ara­noff, a Mary­land Demo­c­rat appointed by George W. Bush, said I’m a bit afraid my chil­dren will find out what I’ve been feed­ing them all these years.”

Despite the early tone, the topic of olive oil adul­ter­ation did not dom­i­nate the hear­ing, as the com­mis­sion­ers and their staff asked ques­tions that might help frame the issues within the con­text of global trade rela­tions and reg­u­la­tory real­i­ties.

Con­spic­u­ously absent was any­one from the Inter­na­tional Olive Coun­cil (IOC) which was a fre­quent sub­ject of dis­cus­sion, with com­mis­sion­ers won­der­ing aloud whether the Madrid-based inter­gov­ern­men­tal orga­ni­za­tion had a stand on a cer­tain point, or an answer to a ques­tion posed. Exec­u­tive Direc­tor Jean-Louis Bar­jol could not be reached for a com­ment on why an IOC rep­re­sen­ta­tive was not present for the hear­ing.

Amer­i­can pro­duc­ers, includ­ing Cal­i­for­nia Olive Ranch, have formed a new group, the Amer­i­can Olive Oil Pro­duc­ers Asso­ci­a­tion (AOOPA) to orga­nize their efforts. Exec­u­tive Direc­tor, Alexan­der J. Ott, said the group rep­re­sented more than 90 per­cent of domes­tic pro­duc­tion.

Ott spent much of his five-minute allot­ment — and more time dur­ing direct ques­tion­ing — stress­ing the nonex­is­tence of any fed­eral mar­ket­ing order for olive oil, and describ­ing the long, drawn-out process to get one adopted. A draft of a mar­ket­ing order was dis­cussed at a con­fer­ence of Cal­i­for­nia pro­duc­ers last Jan­u­ary, and leaked to Olive Oil Times. Since then, its prospect has caused great con­cern in Europe where politi­cians have decried it as a bar­rier to trade.

Within the House Farm Bill, is a pro­vi­sion to include olive oil in the so-called Sec­tion 8e list of com­modi­ties reg­u­lated by domes­tic mar­ket­ing orders. Ott called that ini­tia­tive putting the cart before the horse.”

There is no mar­ket­ing order,” Ott stressed repeat­edly through­out the day, adding the hys­te­ria over a poten­tial fed­eral mar­ket­ing order is some­what humor­ous.” Con­sum­ing pre­cious time at the hear­ing to leave lit­tle doubt that the AOOPA is sim­ply work­ing on such an order, but has not for­mally pro­posed one, was seen by at least one observer as an effort to guide inves­ti­ga­tors to con­sider all options in its report to the House Ways and Means Com­mit­tee on August 12, 2013.

Uni­ver­sity of Cal­i­for­nia at Davis chemist Selina Wang and Rod­ney Mailer from Charles Sturt Uni­ver­sity in Aus­tralia spoke about the newer chem­i­cal meth­ods, called PPP and DAGs tests, stat­ing that cur­rent, widely-used pro­to­cols were insuf­fi­cient to accu­rately deter­mine olive oil qual­ity. The exist­ing restric­tive stan­dards dis­crim­i­nate against good qual­ity olive oil but do noth­ing to pre­vent unac­cept­able prod­ucts being sold in our super­mar­kets,” said Mailer.

Tes­ti­fy­ing on behalf of major importers were the chair­man of the North Amer­i­can Olive Oil Asso­ci­a­tion (NAOOA) John Sessler, and Exec­u­tive Vice Pres­i­dent Eryn Balch, who called for enforce­ment of exist­ing inter­na­tional stan­dards for olive oil grades.

Balch blamed sub­jec­tive sen­sory test­ing” for the highly pub­li­cized results of a 2010 Uni­ver­sity of Cal­i­for­nia, Davis study that found most imported olive oils in Cal­i­for­nia super­mar­kets sub­stan­dard, and she described the broad range of prod­ucts and grades NAOOA mem­bers pro­vide to sat­isfy the grow­ing Amer­i­can demand for olive oil.

Frank Pat­ton, pres­i­dent of Pom­peian, Inc., a major importer based in Mary­land, told the panel his com­pany had been proac­tive in qual­ity cer­ti­fi­ca­tion, becom­ing the one (and only) par­tic­i­pant in a USDA qual­ity mon­i­tor­ing pro­gram recently extended to include olive oil. Call­ing the pro­gram expen­sive,” Pat­ton nev­er­the­less said par­tic­i­pat­ing in the new pro­gram was a pos­i­tive step for Pom­peian, and a pos­si­ble model for oth­ers.

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The hear­ing was the biggest stage yet for a fledg­ling U.S. olive oil indus­try that has its sights set on more than the two per­cent of domes­tic demand it cur­rently sup­plies. Stretch­ing beyond farm­ers’ mar­kets and spe­cialty stores to broader dis­tri­b­u­tion, the new indus­try’s lead­ers are find­ing it hard to com­pete with sub­si­dized Euro­pean farms and some exporters who occupy super­mar­ket shelves with lower qual­ity, often mis­la­beled prod­ucts.

Euro­pean exporters and their trad­ing part­ners in the U.S. view the USITC olive oil inves­ti­ga­tion as a threat to their exist­ing ways of doing busi­ness that might even­tu­ally lead to more reg­u­la­tion, costly qual­ity audits and, pos­si­bly, higher tar­iffs in what has become their most lucra­tive export mar­ket.

Tran­scripts of the Wit­ness Tes­ti­monies at the USITC Hear­ing

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