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California olive oil producers seek new rules to compete with imports

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European Union not thrilled with California's plan to require certification for olive oil purity and quality
The front line in the olive oil war has been drawn in California
California is weighing first-of-its-kind grading standards for olive oil, and importers are fighting it

There's a war over your salad dressing, and the front line has been drawn in California.

The Golden State is considering first-of-its-kind grading standards for olive oil that could have far-reaching consequences for the $5.4-billion global industry.

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For the Record

California olive oil: An article in the Sept. 3 Business section about proposed standards for California olive oil said that "pure" olive oil was extracted from a second pressing of olives and would have to be labeled "olive pomace oil." It is a mixture of virgin and refined olive oils. Under the proposed rule, a label would have to identify the oil as a refined olive oil.

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The California Department of Food and Agriculture may soon agree to require testing and certification for purity and quality. New labeling could also be introduced that would bar common terms such as "light" and "pure" olive oil.

The proposed standards would apply only to the largest California olive growers and millers, but they drew a rebuke from the European Union and the olive oil importer community, which view the rules as a blueprint for wider trade restrictions.

"The manipulative and confrontational tactics are not serving any California industry segment," Eryn Balch, executive vice president of the North American Olive Oil Assn., which represents importers, wrote in a letter to the California Department of Food and Agriculture.

Supporters of the proposed rules say they would level the playing field against government-subsidized European producers who don't have to adhere to enforced quality standards.

"The importers know that if we establish ourselves as the premier, authentic producers of olive oil, we'll cut into their business over time," said olive grower Jeff Colombini of Lodi Farming, just north of Stockton. "They're running scared."

At stake is the lucrative U.S. olive oil market, the world's third largest. Exporters prize America because it's a growing market, whereas European olive oil consumption has been stagnant.

The U.S. consumed 293,000 metric tons of the fruity oil last year, and virtually all of it was imported from countries such as Spain and Italy.

A burgeoning domestic industry is quickly growing, however, almost all in California. Using mechanized farming tools popular outside of Europe, these growers and millers have helped boost American olive oil production tenfold since 2007 to 10,000 metric tons. Industry officials liken the growth to that of the state's wine industry several decades ago.

California producers say they can guarantee a higher-quality olive oil than most of their European counterparts — seizing on years of bad publicity for the European olive oil industry, which has been accused of widespread fraud and adulteration.

There are currently no federal laws strictly regulating olive oil in the U.S. The U.S. Department of Agriculture issues only voluntary certification for extra virgin olive oil, the highest grade available, low in acidity and free of chemicals or additives.

California olive oil makers have lobbied Washington in recent years for federal rules that would have led to testing of imported olive oil, but they couldn't muster enough political support.

Then late last year, the California Legislature voted to establish a commission to boost the competitiveness of the state's olive oil industry. Similar efforts in the past on behalf of the state's almond and pistachio growers have helped those industries thrive.

Made up of local growers and millers, the Olive Oil Commission of California submitted standards to the state's food and agriculture department that included redefining terms for different olive oil products in an attempt to better inform consumers.

Under the proposal, California producers would be barred from using the common labeling terms "light," which describes oil that has been refined with chemicals or additives (not less caloric) and "pure," which means an oil was extracted from a second pressing of the olives.

Instead, labels would have to read "refined olive oil" and "olive pomace oil."

Balch of the importers' North American Olive Oil Assn. accused California lawmakers of crafting a proposal ultimately aimed at one day disrupting imports. American olive oil makers generally make extra virgin olive oil, not pure and light grades, so new regulations would have little effect on the domestic industry.

California olive oil makers "represent 0.2% of world production and 3% of U.S. consumption, yet purport it will be less confusing if the new standard requires different labeling and trade terminology than what is used by the rest of the world," Balch said.

Gregg Kelley, chief executive of the state's largest olive oil producer, California Olive Ranch, said the rules are needed to prevent the erosion of quality.

"We can't sit back," Kelley said. "If we don't get on this wagon educating consumers then the industry won't have a brighter future."

Kelley estimates the standards would apply to just over a dozen millers and about 100 growers in the state. The rules target only growers and millers who handle at least 5,000 gallons of olive oil a year.

In addition to labeling, the proposed standards recommend taste panels to test for defects such as rancidity — something importers say is too subjective.

The proposal also calls for widening the parameters for chemical testing from those recommended by the International Olive Council, a Madrid-based nonprofit organization whose members account for more than 98% of the world's olive oil producers, but not those from the U.S.

New testing parameters are necessary, state producers say, because California's soil is different from Europe's. As a result, an olive oil from the U.S. may show characteristics of another seed or nut oil in European tests. Importers say such a move would welcome more adulteration.

In a letter to the California Department of Food and Agriculture, the European Union warned that the standards would be burdensome and confusing for consumers.

"The EU remains deeply concerned about possible implications to trade in the short and long term," wrote João Vale de Almeida, the EU ambassador to the U.S. "Potential trade effects should be carefully considered by the California Department of Food and Agriculture."

A spokesman for the California agency said its marketing branch would issue a recommendation about the standards as early as mid-September. The department can then choose to adopt, reject or make some of the standards effective, he said.

david.pierson@latimes.com

Twitter: @dhpierson

Copyright © 2014, Los Angeles Times
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