Saturday, February 20, 2010

Government Grants Should Benefit the Entire Olive Industry

The Federal Government has been generous in its assistance to the Australian Olive industry through its grants to promote Australian extra virgin olive oil and table olives. In June 2009 it granted a further $200,000 to this cause.

As an Australian producer one can only applaud this, but it seems only the signatories to the Australian Olive Association (AOA) Code of Practice and licencees of the associated brandmark will be the beneficiaries.

A media release from the AOA on 10 June 2009 stated that ‘the funding would be used to develop a campaign to develop a high profile marketing campaign to promote Australian extra virgin olive oil and table olives’. It added that ‘The campaign will also focus on raising trade and consumer awareness of the AOA’s recently introduced Code of Practice’.

8% of Producers have Signed Code

According to the AOA website there are currently 70 signatories to the Code of Practice, only 8% of the estimated 859 producers in Australia (Australian and New Zealand Olive Industry Directory 2010).

In Victoria with 193 producers registered in the ‘Australian and New Zealand Olive Industry Directory 2010’, 22 (11%) are current signatories of the Code of Practice, in New South Wales 16 have signed (8.6%) and South Australia 11 (9%). These low percentages do not reflect claims by State Associations that the majority of producers are signing up to the Code.

The ABC Landline programme on 21 February 2010 reported that ‘three-quarters (of Australian producers) already have (signed the AOA Code of Practice)’. This would mean that there should be approximately 650 signatories on the AOA website.

The AOA publicity surrounding the Code of Practice and Australian Extra Virgin Brand would give the impression that it is the official Australian Standard. It is not. In its own Code of Practice documents covering quality and labelling guidelines there is the statement ‘There is currently no legal Australian standard for the assessment and description of olive oil…………. The AOA currently recommends the quality and type of olive oil be based on IOOC (now International Olive Council IOC) standards such as extra virgin olive oil’. However, it does not adopt the IOC standards testing regime as the basis for certification as extra virgin olive oil.

In comments reported in The Weekly Times on October 21 2009, the AOA President stated ‘We would like the Australian standard to be law ………that would make life easier for the (the ACCC)’. There is no Australian standard and the one referred to must be the AOA Code of Practice. It would not make it easier for the Australian Competition and Consumer Council (ACCC) as this Code has no testing requirements for adulteration. It would make it easier for the AOA as to comply with their Code a licencee has to be a member.

ACCC sets precedent on Australian Standard

The precedent recently created by the ACCC in imposing court enforceable conditions on the sale of three imported brands that they meet IOC standards supports this view that the IOC standard is more than the de facto standard for olive oil on sale in Australia. These conditions in one instance included the requirements:
• Before supplying a batch of edible oil in Australia labelled ‘olive oil’, ‘virgin olive oil’ or ‘extra virgin olive oil’, require the producer or its supplier of the edible oil to provide a certificate of analysis, or equivalent document, that demonstrates compliance of a sample from the applicable batch with the International Olive Council’s trade standard applying to olive oils and olive-pomace oils (IOC standard)
or other equivalent or recognised standard.
• Commission a National Association of Testing Authorities (NATA) - or IOC-accredited laboratory within Australia to test a sample from the applicable batch against the IOC standard or other equivalent or recognised standard.

The only equivalent or recognised international standards are those defined in the Codex Alimentarius and the European Union trade standards. The AOA Code of Practice testing standards do not have any requirement for the tests relating to contamination or adulteration of olive oil and would not therefore be an equivalent standard.

For this reason, and the fact that to have extra virgin olive oil certified under the AOA brand the licencee has to be a member of the AOA, is argued that the AOA is using government money to promote its brand and licencees and not the entire industry.

Cash Cow or Consumer Conscience?

This raises the question as to whether the AOA is developing the self-proclaimed Australian Standard as a cash cow to provide funds for the activities of the association or as a genuine effort to ensure quality product is retailed to consumers.

This exclusivity also poses a problem for supermarkets which the AOA claims has adopted its code of practice as a requirement for olive oils. This may well mean that by excluding Australian olive oils which do not have the AOA certification, but meet the international standards used by the ACCC in its determinations, the supermarkets may be in breach of competition guidelines.

The AOA has another problem which it has created for itself by its pursuit of non-compliant olive oils. It is common knowledge that the barnea variety planted in large numbers by Timbercorp, and others, produces olive oil which does not meet the IOC standards for sterol composition. It is understood that some supermarkets have been approached to vary their standards to allow a higher than IOC standard level of the sterol campesterol, used as an indicator for adulteration with vegetable oils.

Acceding to this request would not only open the market up to non-compliant oils and possible increases in adulteration, but also begs the question as to whether the standards will be varied for suppliers who have large quantities of ‘extra virgin’ olive oil that does not comply with other specifications of the standards. If these other variations are not acceded to, it can be argued that supermarkets will be favouring one brand by making an exception for campesterol.

Open the Code of Practice to all Australian Producers and Retailers

The AOA needs to follow the lead of New Zealand and make two changes to its Code of Practice and Australian Extra Virgin Brand. The first is to open the Code of Practice up to all producers and retailers – this can be done by charging non-members the equivalent of AOA annual membership on top of the licensing fees, as is done by Olives New Zealand (ONZ).

The second is to make compliance with the IOC standard the basic requirement for certification as Australian Extra Virgin, with other additional quality testing as required. Olives New Zealand makes the reference to IOC standards in their guidelines: ‘To qualify for certification olive oil must meet standards required by Olives New Zealand based on chemical and sensory criteria set by the International Olive Council’. However, to date ONZ have apparently only enforced the sensory and selected quality requirements for their ‘Red Dot’ Certification seal.

Government Grants should Benefit Entire Industry

By adopting these two approaches, the AOA will fulfil its claim of promoting Australian extra virgin and ensuring the highest quality product for consumers. It will be up to producers whether they join the AOA for certification or pay the extra fee charged to non-members.

The Federal Government grants would then visibly be benefitting the entire industry, not just the members of the AOA.

Australian Standard should exceed The International Standards

It will also mean that the Australian Standard, when developed, will meet and exceed international standards and it will be up to the producers of non-compliant oils to dispose of them within the accepted framework. Any other approach will be bending the rules in favour of particular enterprises that have planted varieties, or adopted management practices, which produce non-compliant oils.

For olive oils that have been licensed to use the ONZ QualityMark Seal go to

For those that have signed up to the AOA Code of Practice got to,com_comprofiler/task,usersList/listid,2/Itemid,61/

Simon Field