Pressing for Greater Olive Oil Oversight

When is a virgin not always a virgin?

When the “virgin” describes the type of olive oil sold in the United States.

In a rare case of a trade group asking the federal government for more regulation, the California Olive Oil Council is pressing the U.S. Department of Agriculture to tighten its grading standards. The council wants to prevent domestic and foreign producers from blending lower-grade olive oil, and even other oils such as canola, into what can be sold domestically as “extra virgin” olive oil.

The problem, said Bruce Golino, president of the trade group, is that the U.S. has no legal definition for extra virgin, which in other parts of the world denotes the highest grade of the product. This has created a loophole that allows producers to give their oils a premium label that doesn’t truly reflect what’s in the bottle, said Antoinette Addison, who with her husband, Shawn, operates olive orchard and mill Figueroa Farms in Santa Ynez, Calif.

Although some California producers market blended oils as extra virgin, the move to tighten the rules is aimed squarely at importers.

Olive oil grading standards are generally stricter in Europe, where most of the world’s olive oil is produced. Rules in the U.S. allow foreign producers to ship lower-quality oil here under premium labels, California growers say. Their hope is that tightening U.S. standards will force importers to increase their quality and that as a result, “they will have to charge more,” said Paul Vossen, a Santa Rosa, Calif.-based farm advisor with the University of California. “That will make our industry more competitive.”

The North American Olive Oil Assn., the trade group representing the importers, also supports “updating the industry standards,” said Bob Bauer, its president. But Bauer said mislabeling oil wasn’t as big a problem as the California producers claimed. Although “there may be some smaller players” doing it, he said, the association has a testing program and has not heard of widespread incidents of lower-grade oil being sold as extra virgin.

The USDA will soon solicit comments on proposals to change the standards, which have largely stayed the same since 1948. It could be a year or more before any of the rules are changed.

The California trade group, which requires members to adhere to the European standards, wants the U.S. grades of “fancy,” “choice,” “standard” and “substandard” to be replaced by the internationally accepted terms of “virgin,” “extra virgin” and “refined.” Additionally, it wants more precise standards for the amount of acceptable impurities and acid and a requirement that extra virgin oils undergo chemical and taste analysis.

Such changes would bring the U.S. up to par with the rules set by the International Olive Oil Council.

The call for stricter grading comes amid rapid growth for California’s industry, which accounts for virtually all of U.S. olive and olive oil production but a small fraction of the world market. The value of California’s olive crop is about $40 million, depending on the year.

By comparison, the retail value of olive oil sales in the U.S. will be about $443 million this year, the North American Olive Oil Assn. said. About half of that is labeled “extra virgin.”

Over the last decade, the industry has grown from a handful to more than 150 California olive oil brands, which typically are gourmet varieties produced in small quantities and sold for as much as $30 for a 500-milliliter bottle. Vossen estimates that California farmers last year planted 1,000 new acres of trees producing high-oil-content olives, bringing acreage devoted to olive oil production to 6,000, compared with an estimated 35,000 acres for table olives.

Most of the new plantings in recent years have been of oil varieties, said Dan Sciabica, operations manager for olive oil company Nick Sciabica & Sons Inc. in Modesto. Growers are starting to remove trees that produce the canned variety because foreign competition has pushed down prices, he said.

Over the last five years, the state’s oil production has nearly tripled to 400,000 gallons. Still, Vossen said, that was just a tiny drop of the 60 million gallons the U.S. consumes annually.

Whether California could ever become an international olive oil power is a matter of debate, even within the industry. Production here is mostly limited to small-scale artisan oils. These are typically sold to tourists at wineries or offered in gourmet shops and upscale grocery stores such as Whole Foods Market, which sells Addison’s Camino al Cielo label. “You can make some money, but it won’t be a killing,” Antoinette Addison said.

In the long run, competition and the high cost of growing and handpicking olives in small orchards is going to make artisan production a difficult business, Vossen said. He said, however, that “we could compete quite well with the European imports if we moved to the big scale.”

That would require high-density orchards on relatively flat land where a mechanical harvester could be used to collect the crop, Vossen said. So far there is just one operation that fits the requirements, he said: the 500-acre California Olive Ranch orchard and mill near Oroville.

Such farms should be able to retail extra virgin oil for about $10 a bottle, which is competitive with true extra virgin oil from Europe, Vossen said. Because of the efficiency of California farming, 300,000 acres of high-density olive groves would be able to produce 60 million gallons of high-grade oil, he estimates.

Others believe that olive oil will always be a boutique business in California, even with the rule changes.

By most estimates, there are well under 40,000 acres of olive-bearing groves in California, compared with 6 million in Spain and 4 million in Italy, said Adin Hester, president of the Olive Growers Council of California, which represents the table olive end of the business.

Moreover, the European Union helps underwrite the industry with subsidies. And that doesn’t even factor in nations such as Turkey, Tunisia and Morocco “where the costs are so much lower than here,” Hester said.

“In the international scheme of things,” he said, “we are a nobody.”