Olive Business - News and Comment

Australian Olive Oil Sales in Recession

2012-01-09T02:49:00.000-08:00

According to the Retail World Annual Report for 2011, candy sales, including chocolate, have grown 5.4% in value, as have chewing gum and other ‘refresher’ sales – up 3.1%. Herbs and spices are up 4.9%.

Not so with olive oil where sales have dropped 10% in value and 1.8% in volume during 2011.

The annual report summarises the sales through Coles, Woolworths and Metcash.

The olive oil sales totalled $247.4million. Extra virgin olive oil made up 58.4% of this total with extra light at 21.3% and pure olive oil at 20%.

Imported olive oil totalled 77.1% of sales, with Australian produced olive oil making up the balance of 22.9%.

Conga foods was the market leader with 36.2% of olive oil sales by value, followed by ‘Private Label’ at 16.3%, Minerva at 15.7% and Cobram Estate at 9.4%.

The seeded oils category, which covers the other vegetable oils that compete with olive oil also declined in value by 3.8%, 2.2% by volume.

Perhaps we can boost olive oil sales by increasing its use in the manufacture of chocolate and other candies!

More seriously, the downward trend is concerning and the reasons for it must be analysed and an industry response implemented. Some possible causes are:

The higher price of olive oil compared with competing fats such as vegetable oil and butter.
Consumers heeding dieticians’ advice to reduce fat consumption (while ignoring advice to consume less sugar based candies!).
The negative publicity concerning olive oil fraud and mislabelling resulting in a loss of confidence in olive oil products in general.
Consumers shifting to cheaper butter for cooking as has occurred in Spain to a small extent.

Australian Olive Oil Market Progress Report

2011-03-11T21:44:00.000-08:00

The most recent figures on world trade in olive oil reveal some interesting facts about the Australian market.

While the data for 2009/10 is provisional and those for 2010/11 are estimates, the proportion of Australian olive oil consumed in the local Australian market has changed by just 3% over the last 4 years.

Previous analysis by Olive Business has shown that sales of local extra virgin olive oil have made substantial gains (http://olivebusiness.blogspot.com/2010/01/local-olive-oils-make-market-inroads.html). However, when taken as a percentage of overall olive oil consumption it seems little has changed since the major gains in 2007/8 when the local oils consumed rose from 14% to 23%.

Analysis of the export data also reveals that over the past three years the percentage of local production exported has not increased.

There could be many reasons for this apparent stagnation of market share. For example, we may be seeing a relative decline in olive oil consumption when compared with other vegetable oils as another Olive Business analysis shows. (http://olivebusiness.blogspot.com/2010/06/olive-oil-loses-ground-in-world.html)

It is notable that there is little or no financial or market modelling of olive oil with competing products providing background for decision making on standards and promotional activities. An investment in models would help predict the impact of price fluctuations, exchange rates, reduced imports, changes in labelling and consumer reaction. This modelling should cover all market segments.

The Australian industry would be well advised to critically examine the complex interactions in the marketplace and reconsider the current marketing strategies. Some of the issues to be considered are:

Why is there little growth in consumption of olive oil in Australia over the last five years?
Why has the proportion of Australian olive oil consumed locally seemingly reached a plateau?
Is price a barrier to consumption when compared with other vegetable oils?
Has the negative publicity about low quality olive oils had an impact on sales overall?
Has the consumption of extra virgin olive oil reached a plateau?
Is there the opportunity to make inroads into the lower quality/price segment of the olive oil market?
Has current marketing strategy achieved as much as it can and is it time for change?

Labelling Madness

2011-03-01T13:28:00.000-08:00

Yes, I am being driven mad by what should be the simplest of exercises – labelling our extra virgin olive oil.

Not so simple with the multitude of reviews, cessations and new rules which are happening with no coordination and little consideration of the producer’s bottom line.

Our olive oil is certified organic, so we have those rules to abide by – submitting our label for approval. AQIS have decided, for reasons best known to themselves, to withdraw the use of their seal so that has to come off our label and we are told that we have to have the IFOAM logo on the label now. Then the OFA are developing a national organic mark which will have to go on the label – they haven’t decided on the symbol yet. Seems like a lot of free advertising on our labels.

Oh yes, AQIS is conducting a review of organic legislation and may be introducing another mandatory regulatory mark for export. Soon there will be so many ‘marks’ on the label there will be little room for anything else.

Wondering what all the acronyms stand for – I am not going to bore you by spelling so many out. So many organisations with a finger in the organic pie.

Now there is the Australian and New Zealand Government’s Food labelling review which is about to report its findings, presumably to be enacted within the year forcing more changes to olive oil labels. These are expected to be more about health claims and nutrition panels – so there goes the back label for redesign.

Then according to the draft of the proposed Australian standards for olive and olive-pomace oils being orchestrated by the AOA and Standards Australia we are going to be expressly forbidden – yes forbidden – to describe our olive as olive oil on the label (12.3.2.2. ……..Any other designations (e.g. Olive Oil,…………) are expressly forbidden).

Seriously – they can’t be serious. Added to that there are more rules about what we can use to describe the taste of the oil, whether it was pressed or extracted, hot or cold, first, second or last etc, etc, etc

For export we will still be required to abide by the International Olive Council (IOC) Trade Standard for Olive Oil and Olive Pomace Oils. They differ from the proposed Australian Standard so here comes another label.

We have to have a label designed now for the coming season to replace the perfectly good one we have (we still have a few thousand left) which has been made obsolete by decisions by anonymous committees in far away places. And with all the rule changes in the pipeline the new label will probably be obsolete before it is printed.

For goodness sake, we are just trying to sell olive oil – organic extra virgin olive oil - and make some money out of it. The latter is increasingly hard to achieve with so much time and resources wasted in abiding by these ever changing rules made by those whose product is rules and more rules.

Is There a Perfect Storm Forming for the Australian Olive Industry?

2010-10-16T17:11:00.000-07:00

Many olive groves across Australia planted between 1997 and 2005 will be coming into full production in 2011. The recent drought-breaking rains across most of Australia will enhance this production and 2011 looks to be a bumper year for production of olive oil.

A perfect storm describes an event where a rare combination of circumstances will aggravate a situation drastically. The perfect storm gathering for the olive industry will be from the coincidence of the following circumstances:
1. Potentially the largest volume of olive oil produced in Australia as groves reach mature commercial production.
2. Alternate bearing resulted in 2009 producing a lower yield in some states such as Western Australia so 2010 can be expected to produce larger yields.
3. Good rains throughout growing regions can be expected to enhance yields.
4. The strong Australian dollar making imported olive oil cheaper, the International Olive Council reports an increase of 35% in exports to Australia in 2009/2010.
5. Waning consumer confidence is being reflected in declining retail sales across all retail goods in Australia.
6. The strong Australian dollar making exports to USA and Europe less competitive
7. Near record carryover stocks from the 2009/2010 season in Spain, where almost 50% of the world’s olive oil is produced.
8. The International Olive Council predicts a good campaign in Spain for the forthcoming harvest with near record yields and slightly higher production than the previous season worldwide.

Given all these trends the Australian olive oil industry could be in for stormy times. The most affected are likely to be the larger enterprises which trade at world parity prices. Smaller boutique producers should be less affected as their markets are mainly local, however some downward pressure on prices and more competitive selling conditions can be expected.

Streetwise on Olive Oil Judging

2010-08-26T15:10:00.000-07:00

Ask anyone in the street the unqualified question, ‘Do you think a person should be a judge in a competition in which they have entered a product which they produced or have an interest in?’, the answer will invariably be no.

So why in many Australian olive oil competitions are there judges who are in this position?

The answers to this question most frequently given include ‘the best judges are chosen’ or ‘in a new and small industry there are not enough competent judges available’. Surely in the Australian olive industry, now about 15 years old, there are enough producers and users to fill a judging panel. And if there are not, the problem could be easily solved by the policy of not allowing judges to enter their own oils – they could still judge and there would be no disquiet about vested interests.

The fact that there is disquiet is confirmed by the recent article by presiding judge of the Australian National Extra Virgin Olive Oil Show published in the Olive Oil Times. The majority of the article is devoted to defending the use of judges associated with entries and describing the mechanism to minimise their influence on the result.

The article states that in the final judging for best on show the score sheets from judges with oils in the final selection are destroyed, thereby negating any influence they have on the final result.

In the 2009 Australian National Show, of the 26 judges who judged in the competition, 11 had entries in which they have an apparent interest. In the 5 extra virgin olive oil classes, two classes were won by oils which were associated with judges. Three judges had an association with the overall winner of the competition.

This means that at least 3 judging sheets were destroyed in the final judgement for best on show. If no judges’ sheets had to be destroyed because of interests in oils being judged, the result may well have been different – three independent judges would have had their scores included. The only conclusion can be that the destruction of judging sheets does have an influence on the final result.

It is in the best interest of the Australian Olive Industry to remove the perception of vested interests in olive oil competitions by adopting the policy that judges are not invited to judge if they enter an olive oil with which they have an association. Then it is their decision as to whether entering an oil or judging is more important.

UC Davis Olive Center Report on Olive Oil Quality May be the Subject of Intense Scrutiny

2010-08-24T21:51:00.000-07:00

The recent report published by the UC Davis Olive Center on the quality of imported and local olive oils on sale in California in the USA may come under intense scrutiny.

Much of the scrutiny could occur during the court proceedings associated with a proposed class action brought by a collection of Californian food service individuals and enterprises against the suppliers and retailers selling the allegedly non-compliant olive oil.

The integrity of the process of collecting the oils for testing, sample retention, testing procedures and reporting could be put under the microscope by the defendant’s lawyers.

The Report questions the quality of extra virgin olive oils sold at some of the world’s biggest retailers, supplied by some of the world’s largest olive oil conglomerates.

Apart from the millions of dollars in compensation likely to be claimed, at stake is the reputation of well known brands and millions of dollars of wholesale and retail income. The USA imports substantially more olive oil than any country outside the European Union. It can be expected that the multi-nationals involved will defend the brands vigorously. Money to do this is unlikely to be a limitation.

On the other hand, the apparent Australian involvement in the Report, both by the use of standards promulgated by the Australian Olive Association (AOA) which are not part of the International Olive Council (IOC) Trade Standard for Olive Oil and Olive-Pomace Oil, and the Australian Oils Research Laboratory in conducting the testing, may be required to defend their actions. This could cost substantial legal fees, and even if a source of funding is available to do this, it will be major distraction to the AOA for the duration of the court action – which may be years.

The AOA is acknowledged on the first page of the Report ‘We value the leadership of Dr Richard Cantrill, technical director of the American Oil Chemists’ Society (AOCS); the advice of the AOCS Expert Panel on Olive Oil (particularly Bruce Golino, member of the board of directors of the California Olive Oil Council and Paul Miller, President of the Australian Olive Association)…….’. The AOA is mentioned 5 times in the report - it is unlikely that the association did not have prior knowledge of these references.

This begs the question as to why the AOA, which claims to be the peak body of the Australian olive industry, took the decision to implicate the industry by apparently giving overt support to testing in another country?

There are many other questions which should be asked: did the AOA have a mandate from its members to support testing in the USA; if not, who is going to pay for any costs resulting from the legal action; why confirmatory testing was not undertaken by a second IOC accredited laboratory in Europe; and why testing methods (DAGs and PPP) which have not been accepted by the IOC as reliable were used?

And one final question – what has the Australian olive industry gained from the whole exercise?

All Olive Oil is Better, Extra Virgin is the Best

2010-08-10T17:11:00.000-07:00

As producers of extra virgin olive oil, it seems a convenient part of our marketing strategy to denigrate refined olive oils which are sold as ‘extra light’, or when blended with extra virgin olive oil as ‘pure’ olive oil.

Consumers who buy these refined products are already using olive oil so ‘upgrading’ their purchasing behaviour to buying extra virgin makes sense.

Refining plays an important part in any olive industry as it removes lampante olive oil from the market. Lampante olive oil is the classification for oils which have high free fatty acid or peroxide levels or have organoleptic faults such as rancidity. Apart from soap making or sale for biofuels there are few practical ways of stopping this oil from being sold as extra virgin.

There are also consumers who do not like the strong flavours of extra virgin olive oil and are looking for a flavourless vegetable oil. Many of these are in the foodservice and manufacturing industries which require consistent and flavourless oil.

With the push to sell olive oil into the countries where much of the cooking takes place at high temperatures, for example in a wok, the higher smoke point of refined olive oil (242°C ) over that of extra virgin olive oil (190°C to 210°C, depending on quality) is another selling point.

It is important to note that during refining most (around 88%) of the anti-oxidants (insaponifiable fraction) are removed from extra virgin olive oil along with the free fatty acids. However, the fat or oil (saponifiable fraction) is relatively unchanged. Therefore refined olive oil still has many of the health benefits attributed to monounsaturated fats and sterols.

During the deodorising and bleaching phases of refining, which often take place at high temperatures, there may the formation of a low level of trans fats which are absent in the unrefined olive oil. This transformation takes place in refining processes used for all vegetable oils commonly available in supermarkets..

So maintaining its high ratio of monounsaturated fatty acids makes refined olive oil better than the other mainstream vegetable oils, many of which are solvent extracted and all of which are refined.

As an industry it should be our objective to persuade consumers to shift from other vegetable oils to olive oil. This would then give us an increased number of converts to upgrade to extra virgin olive oil.

Much of the present publicity denigrating refined olive oils will have the opposite effect – make customers lose confidence in the quality of all olive oils, extra virgin or refined. They will then switch to the cheaper vegetable oils such as canola/rapeseed oil which also has a high level of monounsaturated fatty acids – but still lower than refined olive oil

AOA 'Australian Extra Virgin Olive Oil' Brand Fails First Test

2010-07-09T14:44:00.000-07:00

The annual survey of Australian supermarket oils by the consumer magazine Choice is the first comprehensive independent test of the quality of Australian olive oils carrying the Australian Olive Association’s (AOA) ‘Australian Extra Virgin Olive Oil’ certification and brandmark’.

The survey had both good and bad news for the Australian olive industry. The good news was that of the top ten olive oils ranked on taste, nine were Australian. The bad news was that four Australian olive oil brands failed to meet the International Olive Council Trade Standard, and three of these were certified by the AOA as ‘Australian Extra Virgin’ and carried the AOA brandmark.

Over the last two years there have been numerous surveys of supermarket oils carried out at the instigation of the AOA as part of their campaign to persuade Australian consumers to buy locally produced extra virgin olive oil. These surveys have generally denigrated imported brands and lauded the local product – without publishing the full results of the testing.

Choice selected 28 brands of olive oil labelled ‘extra virgin’ and commissioned taste and chemical testing in accordance with the internationally recognised International Olive Oil Council’s ‘Trade Standard for Olive Oil and Olive-Pomace Oil’. The tests are designed to determine the quality and purity of the oil.

Twelve of the olive oils tested were Australian and for the first time the full results of the testing have been published. The first eight oils on the ‘taste’ ranking were Australian showing that in general the local oils were fresher. Of these, five carried the Australian Extra Virgin Brand.

The AOA claims on its website ; ‘The Association has recently introduced a Code of Practice which will guarantee the authenticity and quality of certified products and distinguish them from imported products. To be certified, products must be Australian and have undergone organoleptic (taste) and chemical testings’.

The report in Choice (www.Choice.com.au) claims that ‘to be certified (under the AOA brand) products must be Australian and meet internationally accepted specifications as determined by organoleptic (sensory) and chemical testing’.

This is not correct, the AOA certification requires no testing for purity which would detect adulteration or contamination and the organoleptic testing requirement does not meet the IOC panel testing criteria.

Because of this, unfortunately for the AOA Brand, three (37.5%) of the oils certified Australian Extra Virgin failed to meet the IOC testing regime on which the survey was based. On the taste test, one of the AOA certified oils was described as tired and another with fermentation present.

Consumers can justifiably expect 100% compliance for AOA certified brands, given the AOA guarantee.

Subsequently Standards Australia has announced that it has established a committee to develop a new Australian Standard for all classifications of olive oil.

The committee membership includes representatives from both Australia and New Zealand covering retailers, importers, growers, government and consumers.

The standards developed by the committee will not be mandatory unless mandated by government.

Let’s hope that the committee develops olive oil standards that are based on the IOC International Trade Standard and treat all olive oils equitably, whether locally produced or imported. These standards should then mandated and enforced by the relevant government departments in Australia and New Zealand.

AOA, ONZ and United States Extra Virgin Olive Oil Standards Compared

2010-06-30T05:09:00.001-07:00

AOA, ONZ and United States Extra Virgin Olive Oil Standards Compared

The United States Department of Agriculture (USDA) has recently published quality standards for United States (US) extra virgin olive oil which become effective in October.

The respective olive industry grower associations in Australia (Australian Olive Association - AOA) and New Zealand (Olives New Zealand - ONZ) have for two or so years been trying to establish quality standards for the extra virgin olive oil production of their members, in the case of the AOA, and the industry in New Zealand.

Standards are established for two basic reasons. Firstly, to ensure that the quality and integrity of a product are met and, secondly, as a marketing tool to differentiate a product from competing products. It can be argued that, for associations a third reason is to generate income as the custodian of the standards through certification and licensing fees.

It is timely to assess the new USDA and existing AOA and ONZ standards in the light of these three objectives.

Enforcing the Olive Oil Standards

The first major point of difference between the standards is the custodianship. In the USA, the standards have been developed by the independent USDA. The government department will also be responsible for testing, certification, and compliance. It appears that no income will accrue to the grower’s or other industry associations.

In Australia and New Zealand the standards have been developed by the respective associations which have assumed responsibility for monitoring, certification and compliance. Both the AOA and ONZ charge fees for certification and the use of brandmarks.

The testing for compliance in Australia can be undertaken by the independent New South Wales Government Oil Testing Service of the Wagga Agricultural Institute or by Modern Olives Laboratory Services – until recently a subsidiary of Boundary Bend Limited and now incorporated into Boundary Bend Olives Pty Ltd (a 100% owned subsidiary of Boundary Bend Ltd).

Both the NSW Wagga laboratory and the Modern Olives laboratory have certification from the International Olive Council (IOC). The IOC divides it laboratory certification into: ‘a) public or private laboratories that issue test certificates at the request of third parties; and b) laboratories belonging to olive oil companies that analyse their own oils’. The Modern Olives Laboratory Services is listed in the second category.

Boundary Bend Ltd is the largest producer and marketer of Australian olive oil and it is reasonable to question the independence of the testing function for certification and compliance of competing products granted by the AOA. The data collected through testing has commercial value and it is also reasonable to expect that monitoring and certification should be carried out by an independent third party.

The testing for ONZ OliveMark is undertaken by the independent AsureQuality Ltd, Laboratory Services which does not have IOC certification.

It is in the interests of all those who produce and/or trade in olive oil that any international standard or national standard is developed in consultation with the industry. Thereafter, compliance testing, certification and monitoring should be by an independent institution, preferably governmental, which has no vested or competitive interest in the product.

The USDA standard meets this criterion of independence. It also has the legislative and legal clout to enforce the standards. It is doubtful, considering their status and the cost, whether AOA or ONZ could withstand a legal challenge to their standards or certification – let alone take an active role in prosecuting non-compliance.

Testing for Quality and Purity

Olive oil standards should require chemical and taste testing that give the customers, be they traders or consumers, confidence that the product they are buying is what it is claimed to be.

The international olive industry, led by the IOC, has developed a set of taste (organoleptic) and chemical standards designed to ensure that extra virgin olive oil meets purity and quality criteria. These standards are reviewed regularly and published by the IOC as the ‘Trade Standard Applying to Olive Oils and Olive-pomace Oils’, they are also the standards used by Codex Alimentarius. They provide a legal reference point for international and internal trade in olive oil. The standards have been widely and successfully used in legal actions against producers and traders alleged to have adulterated or contaminated olive oils.

On top of these international standards, nations, regions and organisations have developed their own standards to differentiate their products in the marketplace. These standards are called Designations of Origin and include:

Protected Designation of Origen (PDO/POD)
Protected Geographical Indication (PGI)
Certificate of Specific Character (CSC)

They legitimately assure consumers of the origin of the product and quality criteria that are additional to the basic IOC Trade Standards.

Organisations such as the Italy-based Maestri Oleari have the High Standard which certifies that the extra virgin olive meets production, chemical and nutritional value well above the IOC standards for extra virgin olive oil.

Comparing the Standards in USA, Australia and New Zealand

The table below shows a comparison between the published standards for certification as Australian Extra Virgin Olive Oil by the AOA, the Olives New Zealand OliveMark, US Extra Virgin Olive Oil and the International Olive Council Trade Standard.

Comparison of the Testing Regime for AOA, ONZ, US and IOC extra virgin olive oil standards

Test	Australian Extra Virgin Olive Oil (AOA)	Olives New Zealand OliveMark (ONZ)	US Extra Virgin	International Olive Council Trade Standard

Organoleptic Characteristics	Yes (by panel of 3 AOA accredited tasters)	Yes (by full IOC accredited NZ panel of 8 tasters)	Yes (by USDA accredited tasters)	Yes (by full IOC accredited panel of 8 tasters)
Free Fatty Acid Content	Yes (0.8%)	Yes (0.5%)	Yes (0.8%)	Yes (0.8%)
Peroxide Value	Yes (20)	Yes (15)	Yes (20)	Yes (20)
Absorbency in Ultra Violet	Yes	No	Yes	Yes
Fatty Acid Composition	No	No	Yes	Yes
Trans Fatty Acid	No	No	Yes	Yes
Desmethylsterol Composition (% total sterol)	No	No	Yes	Yes
Total sterol content	No	No	Yes	Yes
	No confirmatory tests required	No confirmatory tests required	Confirmatory tests if linolenic acid values between1% and 1.5% and/or campesterol values between 4% and 4.5%	All listed tests required for all samples
ECN 42 Triaglycerol content	No	No	Yes	Yes
Stigmastadiene content	No	No	Yes	Yes
Erythrodiol and uvaol content		No	Yes	Yes
Wax content	No	No	Yes	Yes
Content of 2-glyceryl monopalmitate	No	No	Yes	Yes
Rancimat test	Yes	No	No	No

The USDA standard comes the closest to the requirements of the IOC Trade Standard – the main variation being that 5 of the chemical tests for adulteration/contamination are only required if the olive oil has high campesterol or linolenic acid levels (above the IOC standard).

The Australian Extra Virgin (AOA) Standard does not require any of the tests for contamination/adulteration, nor does the Olives New Zealand Standard. The AOA organoleptic (taste) testing requires that three tasters that have completed basic AOA taste courses certify the oil – Olives New Zealand requires that this be done by the fully IOC accredited New Zealand Panel. Australia has an IOC accredited panel but the AOA does not insist on its use.

By not requiring testing for adulteration/contamination the AOA and ONZ standards could be misleading consumers and run the risk of certifying product that is not extra virgin olive oil. The associations could well be crippled by any ensuing legal action.

Their standards are more akin to ‘Protected Designation of Origin (PDO)’ certification – more about where the product is from and how it is produced, and less about the purity. The ONZ standard does require a free fatty acid level of less than 0.5% a peroxide value of less than 15, an attempt to ensure that the quality of oils carrying certification is higher than the IOC standard for these tests.

It would seem fundamental to introducing a standard in new olive oil producing countries to start with the internationally recognised trade standard and build regional differentiation on top. The integrity of the oil is then assured and the enhanced quality is then marketed.

The USDA has gone most of the way to doing this, and with the independent administration of the standard, has greater integrity than the AOA and ONZ standards. The cost of administration will also be borne by the USDA which has the clout to prosecute those that do not comply.

Despite the push by the AOA to have their standard adopted as the Australian Standard, it is unlikely that the AOA or ONZ standards will be adopted as national standards before they meet four essential criteria:

They are based on the IOC Trade Standard
They are independently administered by the appropriate government authority
The testing is carried out by independent IOC accredited laboratories and tasting panels
Membership of the AOA or ONZ is not a requirement for certification

For equity and confidence in trading extra virgin olive oil it is important to have national standards. It is equally important that consumers are assured that the olive oil product they purchase is the genuine article. In addition to this basic independent guarantee of quality and purity, it is an advantage for regions to have additional selling points such as PDO certification. The sooner Australia and New Zealand follow the lead of the USDA in achieving this, the better.

Olive Oil Loses Ground in World Vegetable Oil Production

2010-06-08T23:23:00.000-07:00

As olive oil producers and marketers we often become so obsessed with our own product and industry competition that we lose sight of the competition from other vegetable oils.
Olive oil in 2009/10 was ranked 9th in the production and therefore consumption of vegetable oils.
It accounts for 2.16% of world vegetable oil production, down from 2.99% in 2003/4.
Palm oil has overtaken soybean oil as the leading vegetable oil from a production perspective.

The diminishing percentage of the world market attributable to olive oil should provide the incentive for olive oil producers to unite in the promotion of olive oil, especially its health benefits.

Vigilance on quality and potential fraud is essential but the almost weekly worldwide publicity given to court proceedings and non-compliant olive oils damages the reputation of the industry in all producing countries.

Source of Data: USDA Oil Crops Year Book

Rain in Spain will Affect World Markets

2010-03-23T01:55:00.000-07:00

It rained in Spain during the olive harvest - and it rained and rained. Groves were flooded and producers in the southern olive growing regions report severe disruption to their harvesting. Most of the olive oil produced in Spain, which produces almost 50% of the world supply, comes from these southern regions

Reports abound of late harvesting and a substantial tonnage being collected off the ground, destined to produce lampante olive oil and bound for the refineries. Analysts predict a massive increase in the refined olive oil supply as a result, and a shortage of high quality extra virgin olive oil. This shortage may be alleviated by higher than usual carryover stocks from the 2008/2009 season which have been stored with government assistance.

The expected affect on the market worldwide is a decrease in price of the refined 'extra light' and 'pure' olive oils. The shortage of extra virgin olive oil will probably put upward pressure on the price of this category. This will be countered by supplies of cheap refined oils filling supermarket shelves encouraging shoppers to switch from the more expensive extra virgin olive oils.

FDA Determines Olive Oil Product is Unapproved New Drug

2010-03-07T21:48:00.000-08:00

There is an adage that goes ‘be careful what you wish for’. I am sure we have all experienced mentally wishing for something and finding the wish granted in some form far from the one we hoped for.

There has been a push by local olive oil producers in Australia and the USA to ensure that olive oil products are true to label and meet the requirements of international quality classifications and local labelling laws. The ‘wish’ is obviously to remove non-compliant products. The impact in Australia has been to discredit some imported brands and provide a platform to promote locally produced olive oils.

The wish for universal compliance has now taken on another dimension with the new determination by the United States Food and Drug Administration (FDA) that ‘the product ‘Pompeian Imported Extra Light Olive Oil’ is promoted for conditions that cause the product to be a drug under Section………(of the Act). The therapeutic claims on your website establish that the product is a drug because it is intended for use in the cure, mitigation, treatment, or prevention of disease. The marketing of this product with these claims violates the Act’.

The warning letter carrying the determination is available at http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm202828.htm

A quick search of the websites of some of the Australian produced supermarket brands and the Australian Extra Virgin Brand shows that similar health claims observed on the Pompeian website are on these websites.

To quote further the FDA Warning Letter:
‘Examples of some of the claims observed on your website include:
On a web page entitled "Healthy Living," subtitled "Benefits of Olive Oil- Heart Healthy and More":
• "Olive Oil is a major component of the Mediterranean diet, which protects the heart, may lower inflammation and coagulation, and may reduce mortality in the elderly."
• "HEART HEALTHY: Helps to lower the LDL (bad) cholesterol and to protect or raise the HDL (good cholesterol) - especially when substituted for saturated fat. Olive oil is the richest source of beneficial monounsaturated fat and is low in harmful saturated fat."
• "Protects against a variety of cancers, especially when consumed as extra virgin olive oil. Olive oil is rich in antioxidants, which have cancer fighting properties."
• "May increase insulin sensitivity in people prone to diabetes as compared to saturated fat, which increases insulin resistance."
• "Protects against thrombogenesis (blood clots) through the reduction of several plasma clotting factor levels."

The FDA determined that ‘Your "Pompeian Imported Extra Light Olive Oil" product is offered for conditions that are not amenable to self-diagnosis and treatment by individuals who are not medical practitioners; therefore, adequate directions for use cannot be written so that a layperson can use this drug safely for its intended purposes.’

The implications are that any of these Australian brands exported to the USA could be deemed ‘unapproved new drugs’ and will be required to take immediate action to correct any violation. This could also apply to locally produced olive oils in the USA
that make health claims either on the label or on the website that is advertised on the label.

Effectively the FDA have stated that if a product has a website address on the label, any claims on the website are an extension of the label. All the Australian supermarket brands checked have on the back label the website address where the health claims are made.

There would appear to be two options for corrective action. Either remove the health claims or apply for approval of the product as a new drug.

The former would severely compromise one of the major marketing pushes of olive oil – its health attributes. The latter would add an extraordinary dimension to the sale of olive oil in the USA – as a drug.

As the adage so wisely says – ‘be careful what you wish for’. When the can of worms of compliance is opened worldwide – the quest for elimination of non-compliant olive oils can have unexpected consequences.

‘Extra Light’ Misbranded

The FDA also determined that the product ‘Pompeian Imported Extra Light Olive Oil’ does not comply with regulation covering the use of the words ‘light’ and ‘lite’ to describe a food.

To use these terms the product must have 50% of the fat content of the reference food (olive oil). Generally ‘extra light olive oil’ is refined olive oil and the descriptor relates to its colour and flavour. To remedy this breach of labelling regulations the label is required to have words such as ‘flavour’ or ‘colour’ next to the word ‘light’.

Review of Food Labelling in Australia and New Zealand

This should be borne in mind when the olive industries in both Australia and New Zealand make submissions in response to the recently released ‘Issues Consultation Paper on the Review of Food Labelling’.

Some of the 39 questions asked in the Paper are:
- In what way can food labelling be used to support health promotion initiatives?
- To what extent should health claims that can be objectively supported by evidence be permitted? and
- Is there a need to establish agreed definitions of terms such as ‘natural’, ‘lite’, ‘organic’, ‘free range’, ‘virgin’ (as regards olive oil), ‘kosher’ or ‘halal’. If so, should these definitions be included in the Food Standards Code?

Many other questions in the issues paper are also relevant to the olive industry.

The review is likely to bring to a head the vexed question to be addressed by the New Zealand and Australian industries as to whether to allow olive oils to be classified as extra virgin when they do not comply with the chemical criteria of the International Olive Council Trade Standard for Olive Oil (IOC Trade Standard). It would seem obvious that for international trade there should be one rigorous standard that is acceptable to all trading partners, is backed by an internationally accredited testing regime, does not disadvantage one producer in favour of another and presents the truth to consumers.

The closing date for written and online submissions is 14 May 2010. Public forums will also be held in Australia and New Zealand. The schedule and the Issues Consultation Paper is available at www.foodlabellingreview.gov.au

Government Grants Should Benefit the Entire Olive Industry

2010-02-20T17:39:00.000-08:00

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
http://www.olivesnz.org.nz/Marketplace.cfm

For those that have signed up to the AOA Code of Practice got to http://www.australianextravirgin.com.au/component/option,com_comprofiler/task,usersList/listid,2/Itemid,61/

Simon Field
21/2/2010

Local Olive Oils Make Market Inroads

2010-01-12T22:48:00.000-08:00

Australia and New Zealand are entering the second decade of the new tide of olive oil production and it is a good time to assess how they are faring.

Market penetration

In the mid-nineties both countries imported most of their olive oil requirements with only a few boutique local brands available at the high-end foodstores.

Now, there are around eight Australian brands on the shelves of the main supermarkets. In New Zealand there about four local brands on the main shelves with more in the boutique sections of the large supermarkets. Everywhere there are local brands being sold at farmers’ markets, in delicatessens and upmarket food stores. Many restaurants use regional extra virgin olive oils (EVOO) both on the table and as an ingredient.

These inroads into the markets hitherto dominated by imports from Italy, Spain and Greece can be quantified by looking at the trends in olive oil consumption in Australia since 1997. While New Zealand statistics have not been analysed, observation suggests that the trends are similar to the Australian market.

Consumption falls 22% in last three years

The total olive oil consumed in Australia, calculated by adding local production and imports, then subtracting exports, has risen steadily from 17,786 tonnes in 1997/98 to 37,000 tonnes in the 2008/2009 financial year. Growth was 66% from 1997 to 2001 and since then has slowed to 23% over the last 8 years, or about 6% growth a year. Consumption peaked in 2006/2007 at 47,500 tonnes (IOC data), and has fallen from there to 37,000 tonnes last financial year. This represents a fall of 22% over the last 3 years.

Extra Virgin consumption increases 35%

While this growth over the last decade is significant, the growth in consumption of virgin olive oil is even more impressive. In 1997/98, 76% of the olive oil consumed in Australia was refined, in 2008/09, this has dropped to 41%. The percentage of olive oil consumed that is virgin – most of which is extra virgin – has increased from 24% in 1997/98 to 59% in 2008/2009. Add to this the growth in olive oil consumption overall, the increase in EVOO consumption has gone from 4,239 tonnes to an estimated 21,000 tonnes during the period being considered.

This is real evidence of the success of the Australian olive oil industry in replacing imports and converting consumers to the use of extra virgin olive oil in preference to the ‘extra light’ and ‘pure olive oils’.

The factors affecting the consumption of olive oil in Australia are complex and include local activities over which producers and retailers have control, and international market fluctuations and trends over which they have little control.

Reasons for increased consumption

It is no coincidence that the world’s highest consumers of olive oil are the countries in which olive oil is produced. This is because the cuisine is built around this healthy ingredient and it is part of the culture. This leads to promotion of olive oil at the local level and from here the word spreads through local markets, produce shops and restaurants. Then converted consumers start purchasing the cheaper local olive oils in the supermarkets. So the first credit must go to the producers who market and sell their products locally with passion.

However, this push is limited in the volume it can dispose of at the relatively high prices expected at the early stage in the industry. The real volumes start to move when the price drops and reaches parity with the price of competing vegetable oils or imported stocks. This has happened in Australia where the prices of many brands of local oil compete with imports. And it is starting to happen in New Zealand with three or four brands.

Again it is the producers who deserve the credit for streamlining the supply-chain and reducing input costs. No promotion campaign would have successfully increased sales to the current level if the product was not affordable.

Overlay the international and national promotion of the increased health benefits of extra virgin olive oils, the taste campaigns and the ‘outing’ of imperfect imported products and one gets the successful campaign that the Australian and New Zealand olive producers have conducted.

However, the evidence of substantial reduction in consumption over the last three years is a concern.

Capturing the other half

Gaining the first 50% of the market is the easiest, getting the rest is harder work. The industry must approach this in two ways: increase overall consumption; and replace more imports. Many will see the increase in the percentage of extra virgin olive consumed as a third push – but this is not necessarily a good tactic as there is demand for refined oils and refining disposes of oil that does not make the virgin classification.

Some of the outside influences that will now limit the growth of the industry are; promotion of cheaper cooking oils, increasing overseas production, and exchange rates.

Olive oil is ranked ninth in the world table of production (USDA 2008), and therefore consumption, of the major commodity vegetable oils. This is mainly due to price and any increase in the price of olive oil will decrease consumption. In Australia, canola is a major oilseed crop and the health benefits of high oleic acid canola oil is being promoted as similar to those of olive oil. It is considerably cheaper on supermarket shelves.

The impact of price of olive oil may be one of the reasons that consumption has declined from 2007/8 to 2008/09 due to the global financial crisis and consequent reduced disposable income.

The level of overseas production of olive oil in general, and specifically extra virgin olive oil, will have a dual impact on sales of Australian and New Zealand olive oils.

First, the world trend to greater production of extra virgin olive oil over the refined oil will continue to reduce the price.

Second, increased world production from trees planted well before the global financial crisis affected consumer spending will also tend to oversupply and lower prices. In Spain we are already seeing significant reduction in exports, and high levels of storage at a time when the predictions are for an increase in production over last year. With the high value of the Australian and New Zealand dollar favouring imports and working against exports, an assault from European Union exporters on the lost market share can be expected.

Some current marketing tactics are short term

The campaign in Australia to expose impure extra virgin olive oil imports has received wide acclaim amongst producers. So much so that the publicity implies that all imported olive oils are imperfect.

While ensuring consumers are getting what they paid for is commendable, the publicity generated is not productive for the following reasons. It is bad marketing to publicly talk down a product – in this case the commodity olive oil - as it tarnishes the reputation of the product in general. Consumers generally do not read beyond the headline unless they have a specific interest and may switch to alternatives such as canola oil.

The constant monitoring for fraud will lift the quality of imports so a more competitive quality product will be on the shelves. It may also lift the price of imports, prompting local producers to lift prices and consequently lose customers to cheaper vegetable oils.

It may also bring a response in the form of restrictive imposts and similar campaigns targeting Australian and New Zealand olive oils from countries which are potential markets, such as Italy. The publicity around the testing and consequent action by the Australian Competition and Consumer Commission on fraudulent oils has generally ignored the reports that one in four Australian brands tested by Modern Olives at the same time failed to meet IOC specifications.

The campaign is a short term tactic as its success will mean that only quality oils are imported, ending the effectiveness of the campaign in discrediting imported olive oils as a ploy to replace them.

The ‘Fresher Tastes Better’ campaign run by the Australian Olive Association to promote its brand is also a short term tactic. Australian olive oils are only fresher than imports for six months of the year – before the Northern Hemisphere harvest comes in. The importers of these fresher oils can piggy-back on the Australian campaign by marketing the incoming oil as more recently harvested and fresher. It also gives a free marketing kick to other Southern Hemisphere producing countries, such as Argentina and South Africa, seeking to sell their new season oils in Australia.

Exchange rates are also important in the affect on the price of imports. The Australian dollar dipped significantly from September to December in 2008, from consistent highs through 2007 (Reserve Bank of Australia data). This almost certainly contributed to the highest consumption recorded in Australia in 2006/2007 and the fall away in the subsequent two years as the cost of importing increased. The Australian dollar is now back to the levels of 2007 and we can expect cheaper imports and downward pressure on the price and consumption of Australian and New Zealand olive oil.

New approaches needed

The substantial inroads the Australian and New Zealand olive industries have made into markets dominated by imports are impressive. The producers of the local oils deserve the credit for this as their passion and influence has spread the word like ripples from multiple stones tossed in a pond.

The slowing of growth in consumption, potential worldwide oversupply and unfavourable exchange rates are going to make the next increment more difficult.

New approaches are needed to increase the consumption of olive oil, whether imported or not, over competing vegetable oils.

The industry should be working towards providing the consumers with better quality at lower prices – price being the ultimate determinant of purchase.

A stronger campaign to promote the health benefits of extra virgin olive oil produced in Australia and New Zealand should give ascendancy over competing oils, especially with our aging population. This will need to be supported by research showing that local oils have greater health benefits than imported oils.

In the future, Australia especially, and New Zealand to a smaller extent, will need to export increasing amounts of olive oil. It is therefore important to consider the reaction of potential customers to campaigns which denigrate all imported oils without distinction or by association.

Is Extra Virgin Olive Oil becoming too precious?

Finally, producers need to consider whether they are giving the impression to consumers that their product is so special that it is to be used sparingly.

An example of this approach of extra virgin olive oil being promoted as too special for general cooking was found on the back label of an Australian brand in a supermarket. Besides describing the oil as ‘viscious’ (presumably very robust!), the label stated ‘This is a table oil too good for cooking – but if you must………’

During a recent visit by the author to a New Zealand farmers market, this approach to selling extra virgin olive oil was also evident. No doubt the relatively high price is the underlying reason for this.

To increase consumption of Australian and New Zealand olive oil we must encourage consumers to use extra virgin olive oil for all cooking – as a dressing, ingredient and cooking medium. It is up to us producers to make sure that it is affordable to do this.

New Zealand Judges Show the Way

2009-11-04T18:47:00.000-08:00

Judges in the Olives New Zealand national olive oil awards have shown leadership by not entering their own oils in the competition. This follows controversy in last years awards when the top award went to the oil produced by the head judge.

The move to ensure that judges have no vested interest in the outcome of the competition will remove this distraction from the excellence of the olive oils winning the competition.

In Australia, judges continue to judge in the Australian Olive Oil National Extra Virgin Olive Oil Show when their own oils, or those in which they have an interest, are entered. Of the 26 judges who judged in the competition, 11 had entries in which they have an apparent interest. In the 5 extra virgin olive oil classes, two classes were won by oils which were associated with judges. Three judges had an association with the overall winner of the competition.

The report on the Australian competition acknowledged that ‘some judges were exhibitors, or had an association with an exhibit. To remove any possibility of bias, these judges assessed classes that did not include their oil, and they were at no time in a position to influence the outcome of a class which included their oil’.

It also states that at the conclusion of the judging ‘the twelve gold medal oils were subjected to blind tastings by judges working as one panel’. Three of these gold medal winners were associated with four judges. This implies that all judges judged the oils for the overall winner – unless the judges with an interest in the oils were excluded. This would have indicated to the other judges that the oils of those excluded were in the final 12. Either way the judging would be compromised.

It is notable that some Australian judges who have judged and entered their oil in the past, judged in this year’s competition but did not enter their oils.

Surely it would be much simpler and more ethical for the Australian competition to follow the lead from New Zealand and bar any judges who enter their oils.

Fresher Sounds Better Too

2009-10-29T16:13:00.000-07:00

This year’s winners of the American Oil Chemists’ Society (AOCS) award in Part A, B, and C of the Olive Oil Category are E.A.S. Heraklion in Crete (part A and B) and Chemiservice SAS in Bari, Italy (part C). The award is for member laboratories deemed to be the most accurate in a series of tests set by the Society in a given year.

A visit to the Australian Olive Association (AOA) website industry home page will find a newsflash captioned ‘Modern Olives most accurate lab in the world’. The newsflash goes on to reveal that the lab was named the ‘most accurate lab in the world in 2007-2008’ by the AOCS. Yes – but that was this time last year and the news adorned the AOA website for some months then.

So why is the AOA so keen to promote old news? It could be advertorial, or it could be a perceived need to justify accreditation of a laboratory of arguable independence by the AOA for its Code of Practice quality programme, or it could be to give some weight to the recent ‘independent’ research by Modern Olives that claims 80% of extra virgin olive oils imported into Australia failed a range of tests.

Whatever the reason, it is old news. It is like putting last years award sticker on this year’s olive oil.

In olive oil fresher may taste better, in news, fresher sounds better.

ACCC Adopts IOC Standard for Olive Oil

2009-10-27T15:45:00.000-07:00

In carrying out an investigation into reports that Extra Virgin Olive Oil being sold in Australia was not true to label, the Australian Competition and Consumer Commission (ACCC), used the International Olive Council (IOC) Trade Standard for Olive Oil as the benchmark for testing.

Despite stating that ‘currently there is no mandatory standard for extra virgin olive oil……’ the ACCC set a strong precedent by using the IOC standard and stating ‘The IOC standard defines extra virgin olive oil and sets criteria for purity and quality. While the standard is not mandatory, it is a useful and recognised guide for establishing the essential elements of genuine extra virgin olive oil’.

Effectively the ACCC has adopted the IOC standard for court enforceable undertakings. This could set an important legal precedent in Australia for legal actions involving specifications for olive oil.

The Australian Olive Association (AOA) President, Paul Miller, was reported by the Weekly Times (October 21 2009) as being ‘impressed’ by the ACCC’s action. He was also reported as saying ‘We would like the Australian standard to be law…….that would make life easier for (the ACCC)’.

This is unlikely as the so called 'Australian standard' – a standard developed for the AOA Code of Practice available to AOA members only – falls far short of the requirements for purity and organoleptic (taste) testing in the IOC Trade Standard. Its lack of rigour could create many problems for the ACCC in any legal challenges related to olive oil meeting specification.

It would be far easier if everyone in the Australian Olive Industry adopted the IOC Trade Standards and, to provide regional differentiation, added to them by specifying additional source and quality requirements. The ACCC action probably means that this will be inevitable.

ACCC Only Credible Independent Watchdog

2009-10-26T18:24:00.000-07:00

It must be that time of year, an ‘independent’ laboratory has tested imported olive oils again and there are claims that 80% of extra virgin olive oils imported into Australia were not extra virgin.

Last year 'independent' tests commissioned by the Australian Olive Association (AOA) and carried out by the Australian Oils Research Laboratory claimed all the imported olive oils tested were not what they claimed to be. The independence of the AOA, which represents Australian producers, is obviously questionable, as is that of the Australian Oils Research Laboratory whose spokesperson was reported to have said on ABC Rural Report (Report from the Riverina, 29 May 2009) that he believes the (International Olive Council, IOC) Standards are too restrictive and find fault in Australian oils that are merely different – and in his opinion the best. Hardly a statement from an independent watchdog.

This year, again with uncanny timing to coincide with the AOA annual bash in Canberra, another set of tests have been released. An ABC Rural Report on 22 October states ‘A study has found that more than 80 per cent of imported "extra virgin" olive oils are falsely labelled. Lisa Rowntree, from the Australian Olive Association, which represents olive growers, says the tests were done in an independent laboratory near Geelong, and the problem makes it difficult for the local industry to compete’.

But Paul Berryman, from the Australian Olive Oil Association (AOOA), which represents olive oil importers, says very few imported extra virgin oils were found to be impure and the test was done to discredit importers. ‘Now they are obviously just deciding that the best way to market their product is to discredit their opposition’.

It may well be that Mr Berryman is right. The independent laboratory near Geelong is Modern Olives which, as a wholly owned subsidiary of Boundary Bend, is far from independent. Boundary Bend claims to be Australia’s largest producer of extra virgin olive oil and would directly benefit from a crackdown on imports. It is also highly unlikely that all imported extra virgin olive oil was tested so a claim that 80% were found to be falsely labelled is misleading.

This tactic should also worry Australian producers as the ‘independent testing’, apparently endorsed by the AOA, could also be directed at Australian brands and used to discredit them to gain market advantage.

Fortunately for the Australian Olive Industry, which includes both local producers and importers, the Australian Competition and Consumer Commission (ACCC) has recently conducted an independent investigation. Testing a selection of imported and locally produced oils, labelled extra virgin, against the International Olive Council standards, only three samples, all imported, were found not to be extra virgin.

Interestingly, in using the IOC standard as the benchmark for quality and purity, the ACCC has adopted a standard which is far more stringent than the AOA standard for its Australian Extra Virgin Brand which does not require any of the tests for purity.

It would also be interesting to know whether the ‘independent’ laboratory from Geelong, Modern Olives, tested the full range of Australian ‘extra virgin olive oils’ and refined olive oils for compliance with the IOC specifications for sterol composition. Modern Olives, through its nursery operations, has been a major supplier of the Barnea variety which research has shown has a high level of campesterol causing much of the oil produced by this variety to fall outside IOC specifications for extra virgin. Boundary Bend, in buying the Timbercorp assets, has also become the owner of groves which have substantial plantings of Barnea.

Again, it seems to be a case of adopting the IOC standards when it is convenient and saying they are too restrictive when inconvenient - ‘do as I say, not as I do’.

The Australian Olive Industry representative organisations – The AOA and the Australian Olive Oil Association (AOOA) – should agree to a regime of independent testing through the ACCC to ensure that all olive oil sold in Australia meets IOC specification. This is the only way to put an end to the ‘them and us’ public brawling which harms the consumer perception of all olive oil – locally produced and imported.

Attempts to Change International Olive Oil Standards Stall

2009-10-18T18:16:00.000-07:00

The attempts by Australia to change the Codex Alimentarius ‘Standard for Olive Oils and Olive Pomace Oils’ seem to have stalled. The Australian delegation has been leading the charge to amend the standards to allow higher levels of linolenic acid in olive oils to accommodate apparent variations in local growing conditions. Recently, the arguments for the proposed amendments have been extended to include higher campesterol levels, mainly to accommodate the high levels exhibited by the Barnea variety which has been extensively planted in Australia by large investment groves.

The higher than specification levels of linolenic acid and campesterol preclude the export of ‘outlier’ olive oils to the European Community, USA and other countries that are signatories to the Codex Alimentarius Standard for International Trade.

The levels of linolenic acid and campesterol in olive oils are important in detecting contamination or adulteration with vegetable oils.

In response to a report submitted by the Codex Committee on Fats and Oils to the thirty-second session of the Joint FAO/WHO standards programme of the Codex Alimentarius Commission, the Committee agreed to go back a step and circulate two alternative proposals for a footnote to the level of linolenic acid in the standards which would allow higher levels as long as three other tests were undertaken. One of these three tests would be that the campesterol level would need to be lower than 3.5% (normal allowable 4.0%) of total sterol composition. It then determined that if no agreement could be reached at the next session, the Committee would recommend the discontinuation of work on the level of linolenic acid.

Given the arguments, including those from the European Community, put forward by other delegations against the proposed changes to the standards, it is unlikely that proposed changes to campesterol levels will make any progress in the foreseeable future.

This creates a problem for those enterprises that have large volumes of olive oil from the Barnea variety in Australia which is high in campesterol. There is not enough low campesterol olive oil available locally to blend the level down to be within specification. The oil cannot be exported to countries that are signatories to Codex, and it cannot be refined as even after refining the campesterol level is likely to be out of specification for refined olive oil.

It would appear that the only option for unloading this high campesterol oil, which does not comply with international standards for olive oil, is to sell it on the local market as extra virgin olive oil as sanctioned within the Australian Olive Association Extra Virgin Olive Oil specifications.

The implication of this for other producers in Australia is that the prices for EVOO will be forced down as the large volume of non-compliant oil is sold off locally. There are also implications for New Zealand producers as standards for olive oil in Australia and New Zealand are set by Food Standards Australia and New Zealand (FSANZ). The apparent acceptance of the sale of high campesterol oil by FSANZ may mean that cheap high campesterol oil may overflow into the New Zealand market from Australia.

Simon Field
Olive Business

New Zealand Regions Get Ahead

2009-08-30T22:44:00.000-07:00

The new olive growing regions of New Zealand in Marlborough/Nelson and Hawkes Bay are as close to Paradise that some of us will ever get. Interspersed amongst the world famous vines giving us great whites and much improved reds, the olive groves produce a wide array of respectable, and occasionally exceptional, olive oils.

During two-day seminars in Blenheim (South Island) and Napier (south east of the North Island) I had the pleasure of meeting the enthusiastic producers, distributors and retailers of these regions and tasting their new season olive oils. The purpose of the seminars was to provide taste training, evaluation of olive oils and blending - all from a market perspective.

Data for the size of the New Zealand market, and the local markets in each location, was scratchy. However, data purchased by Olive Business from the New Zealand statistical office shows that imports of olive oil were around 4,000 tonnes a year and local production was estimated to be around 400 tonnes. Approximately 30-40% of imports are extra virgin olive oil (EVOO), add the local production to this and we get an estimate of 1500 tonnes of EVOO consumed every year in New Zealand. This is more than three times current local production, showing that many New Zealanders are already ‘educated’ in the use of extra virgin olive oil. This makes the marketing task easier – shifting usage to New Zealand product as opposed to getting consumers to use a new product.

To Market, to Market

The first day of the seminars examined this market environment and participants tasted their own oils with special emphasis on style and flavour. Each oil was also given a commercial assessment and some interesting trends emerged. Most of the olive oils from both locations were assessed as medium or robust. There were few delicate oils and even those were on the medium side of delicate. The oils from particular varietals were generally similar. In both locations there were olive oils that had well differentiated, even outstanding, flavour profiles – but these were the exception.

Hawkes Bay seminar underway

The olive oils available were mostly of Italian varietal origin – frantoio, leccino – with some picual, koreneiki, barnea and picholene. The Spanish varieties (picual and nevadillo blanco) did not exhibit the aromatic tropical fruit characteristics expected and given that consumers are used to this style for imported oils there is an opportunity for development in this area. The absence of a range of complex delicate oils usually associated with later harvesting creates a further opportunity.

In Hastings imported olive oils off the local supermarket shelf were slipped into the blind tasting to test the ‘all imported oils are faulty’ slogan. No rancidity was detected – however the floral-ripe tropical fruit aromas of the Spanish oils, imparted presumably by the Picual, Hojiblanca and Picudo varieties in the blends, disconcerted some of the tasters.

The price difference between the imported and local brands in the supermarket is closing but still significant. In some of the smaller supermarkets the local brands were on the bottom shelf, a sure sign that they were not moving, and the packaging was mainly in 250ml bottles, a sure sign that the product is expensive.

Given all these considerations – the limitations of local production, the style of the oils, price points to compete with imports and consumer preference – seminar participants worked in teams to develop a market brief and blend oils to meet the brief.

The Blenheim ‘blokes’ team works on its blending brief

This exercise was most revealing. The openness of the participants and the determination to take the industry from its current adolescence to maturity was most productive. The briefs developed were varied, practical and all could be implemented. The process revealed the valuable collective knowledge of the teams. Gaps in the range of oils available were identified and the advantage from a taste and volume perspective of blending became apparent.

Pricing

Visits to a number of groves, including some of the largest, revealed the horticultural limitations that define productive capacity and oil characteristics. Early frost, pruning, disease, harvesting, and processing method and capacity affect the oil profile as much as the variety. Most accepted there was work to be done in these areas to achieve optimal efficiency and reduction of end price.

In the grove with (l-r) Bob Marshall, Shona Thompson, Rachael Speedy and Chris Crompton-Smith

It was acknowledged that price was both the determinant of profitability for the producer and the most important consideration with consumers. The presence of retailers brought reality to the discussions with the simple message that the price expectation of producers was too high and there needed to be adjustments to the supply chain to bring the retail price down within consumer expectation set by imported brands.

One way of reducing the price, obtaining more delicate oils and insuring against crop failure is to retain a proportion of oils from previous seasons. Generally the oils tasted were robust enough to do this. This also enabled ‘back-blending’ to reduce price and preserve particular traits for consistency. Blending with refined oils and other vegetable oils were also discussed to produce products which will compete directly with the imported ‘pure’ and light olive oils in supermarkets.

Differentiation

Differentiation in markets for the olive oils for the two regions can be achieved through Denomination of Origin (PDO) certification and ‘tested to international standard’ labelling. The testing to international standard would provide a range of chemical data to further define the health attributes of the fatty acid profile and anti-oxidants of the olive oils. The polyphenol levels from the analysis will provide data for blending for longer shelf-life.

The ‘tested to international standard’ branding would also position the complying oils ahead of the existing ‘ONZ Certified Extra Virgin’ mark which has a far less rigorous testing regime.

The ‘girls’ teams in Blenheim differentiating their oils through blending

To round off the regional advantages for marketing, both regions have well established wine and tourism industries on which to build the olive oil profile. The food culture is well developed and in most restaurants at least two local extra virgin olive oils are used. Visits to retailers showed some reluctance to stock and promote local oils because of price. There is an adage which says ‘if you cannot win in the local market you won’t win in other markets’. The intention expressed by participants is to work on this through collection and analysis of market data and more cooperation along the supply-chain.

Kiwi Oil

On a lighter note, while enjoying delicious fish and chips on the sunny harbourside in Napier, we noticed an offering of ‘green salad drizzled with Kiwi Oil’. Was this a new product to compete with Emu Oil we asked the waitress? With the confidence of youth she told us it was the oil extracted from the Kiwi fruit. We smiled when we realised that the oil is in fact a locally produced olive oil called ‘Kiwi’. There is work to be done with foodservice too.

Harnessing the Assets

The Marlborough/Nelson and Hawkes Bay olive industry in New Zealand, as reflected by participants in the seminars, is determined and talented. Their olive oils are good quality and market success will come through differentiation through taste, price and innovative marketing. The teamwork during the seminars shows that there is the cohesion, resourcefulness and increasing knowledge to make this happen.

These are the assets of the industry which when harnessed will bring its success.

Align all this with the already established local food and wine culture attracting tourism and the worldwide profile of the wines – Marlborough/Nelson and Hawkes Bay will be Paradise regained.

Acknowledgment
Thank you to all who showed typical Kiwi hospitality and endless humour, especially Phyllis and Mark Heard of Awatere River Extra Virgin Olive Oil who took the initiative to organise the seminars, and Rachael Speedy and Nigel Macintosh of Paul Holmes Extra Virgin Olive Oil who promoted the Hawkes Bay seminar. Thanks also to Andrew and Delyth Taylor of Olive Culture who took me to many groves in Hawkes Bay and taught me a lot about pruning and how to drive up frighteningly steep hills.

Australian EVOO Import Prices Down 19%

2009-06-17T22:03:00.000-07:00

The latest statistics for imports of olive oil into Australia show a decline of 19% in the price for packaged virgin olive oil from February to May 2009. The average price per litre in May 2009 was $5.01 for packed virgin olive oil. The price of $3.66/litre for bulk virgin olive oil is a drop of 37% from the high of $5.82/litre in January 2009.

These reduced prices reflect the low prices in oversupplied European markets which are expected to continue for some time.

Quoted prices for bulk olive oil in the Australian market can be expected to fall with some anlaysts predicting an increase of 5,000 tonnes over last year for the current harvest. Prices will possibly be further driven down by the fire sale of substantial quantities of olive oil from the MIS groves in administration and the off-loading of carryover stocks from last season.

While this is not encouraging for producers, it is good news for conumers who will be able to purchase Austrlian olive oil for less. In the long term this will benefit the industry as those consumers who abandon traditional imported brands for Australian oil are likely to continue to buy the local product as prices rise again.

Australian Import Prices Continue Downwards

2009-05-25T02:39:00.000-07:00

Source : Australian Bureau of Statistics

Prices of virgin olive oils imported into Australia in April continued the downward trend with packaged olive oils dropping 4.52% to $5.38/litre (customs value) and bulk virgin olive oil dropping 14.64% to $4.09/litre (customs value).

The International Olive Council (IOC) reports that despite prices starting to level out in Europe, the price of virgin olive oil has dropped 29% in Spain and Greece and 25% in Italy over the past year. The final tonnage for the Spanish crop is expected to fall below predictions this year due to adverse weather conditions.

OLIVE OIL PRICE TRENDS

2009-04-29T00:58:00.000-07:00

Australia

The import prices (cv) for packaged virgin olive oils into Australia during March declined for the first time in 4 months while the bulk price continued to decline.

The average price for packaged virgin olive oils dropped to 8.5% to $5.63/litre and bulk virgin olive oil dropped 5% to $4.79/litre.

The falling prices can be expected to continue with an improving Australian dollar, weak prices in Europe and the global financial crisis slowing the movement of stock.

The lowering of import prices will continue to put downward pressure on prices of Australian olive oil.

Source: Australian Bureau of Statistics

World Prices

The graph below shows a steep downward trend in producer prices for extra virgin olive oil in the European markets which set the prices for international trade.

The upside is that the reduction in price of olive oil will encourage consumers to increase consumption. Another positive is that with lower production of competing vegetable oils through application of less fertiliser, and sustained consumption driven by more fried food being consumed in China and palm oil being used to generate electricity, the price of vegetable oils may well increase. This could mean olive oil increasing its share of the international edible oil market.

The futures exchange in Jaen Spain, Sociedad Rectora del Mercado du Futuros del Aceite del Oliva SA, Jaen (MFAO) shows that there is little confidence in prices increasing over the next year with quotes as low as €1585 per tonne. This price is well below the price of production and converts to €1.44/litre (approximately AU$2.88/litre).

IS AUSTRIALIAN OLIVE OIL ALMOST ENTIRELY EXTRA VIRGIN?

2009-04-29T00:13:00.000-07:00

It is not logical to state that Australia produces almost entirely extra virgin olive oil, and then argues in international forums that trade standards should be eased to allow ‘a significant proportion’ of currently non-complying olive oils to comply with extra virgin classification.

Non-compliance of Australian olive oils

The survey of Australian Olive Oil Cultivars to Determine Compliance with International Standards (RIRDC Publication no: 08/167) October 2008 (Survey on Compliance) casts doubt over the compliance of varietal Australian olive oils with the International Olive Council International Trade Standards.

The research was funded by the Australian Government and industry funds from the Australian Olive Association (AOA) and is available at www.rirdc.gov.au .

The survey reports that of 143 samples of olive oil tested over 2 years, 87 did not comply with one or more of the chemical tests required for extra virgin olive oil. The tests are directed at assuring quality and detecting adulteration with refined olive oils and other vegetable oils.

Of 143 samples of olive oil tested, 87 did not comply with one or more chemical tests for extra virgin olive oil

According to the Australian Extra Virgin Brand (the Brand) website ‘Australian olive oils are almost entirely extra virgin olive oil.’ (www.australianextravirgin.com.au)

This assertion will be difficult to substantiate with supporting data as not all Australian olive oils in the market undergo the full range of International Olive Oil Council (IOC) quality, purity and sensory tests required for classification as extra virgin olive oil to International Trade Standard.

In fact, so confident is the AOA that Brand olive oils are ‘almost entirely’ extra virgin, that it does not require the full range of tests to comply with international standards. Or could it be that the tests are not required for fear an embarrassing number of olive oils do not meet the extra virgin criteria. The survey on compliance shows that this is quite possible.

Or could it be that the tests are not required for fear an embarrassing number of olive oils do not meet the extra virgin criteria. The survey on compliance shows that this is quite possible.

Australia is vocal in the international olive oil standards scene in its attempts to broaden the Codex Alimentarius trade standards for olive oils. Australian delegates regularly attend the Codex Committee on Fats and Oils, the most recent was held in Sabah in February. On the agenda was “The proposed draft amendment to the Standard for Olive Oils and Olive Pomace Oils: Linolenic Acid Level”.

Australia features prominently in the ‘general comments’ of the agenda papers. Under discussion are; the linolenic acid limit of 1.0%, and campesterol levels in olive oils specified by the Codex Standard.

Australian delegates argue that there are regional differences in the chemical analysis shown by authentic olive oils which should be allowed for in the Standard. For example the papers state ’that a significant proportion of Australian olive oil samples do not meet the 1.0% limit for linolenic acid’. This comes from research presented by Australia that showed from crop years 2002, 2003 and 2004, of 754 samples of olive oil tested from all states, 4.2% were outside the standard.

The papers point out that during the testing period, Australia accounted for 0.07% of world production and no more than 0.05% of world exports. This begs the question of the futility of investing valuable industry money in trying to change an international standard which affects 4.2% of Australian production – when there is ample (95.8%) oil available to blend the high level down.

Perhaps more significantly, Australia also argues against a reduction to 3.5% in the allowable level of less than 4% campesterol as a percentage of total sterols in olive oil. Australia asserts that ‘Data on sterol content reveal that levels for campesterol are consistently high in a significant proportion of authentic Australian olive oils’. Campesterol level is one of the indicators used to detect adulteration with vegetable oils such as sunflower and canola.

Non-compliance of the Barnea Variety

The Survey on Compliance shows that the mean value of campesterol for the tested samples of the variety Barnea is 4.5%.

Technically, these oils cannot be called extra virgin – they may be authentic, but not extra virgin.

Technically, these oils cannot be called extra virgin – they may be authentic, but not extra virgin. The definition of extra virgin olive oil is ‘virgin olive oil which has a free acidity, expressed as oleic acid, of not more than 0.8 grams per 100 grams, and other characteristics of which correspond to those fixed for the category in this standard’. The ‘other characteristics’ include the regime of chemical testing.

If an olive oil does not comply with the chemical standards, it cannot be called extra virgin. In fact it cannot be called olive oil, according to the IOC International Trade Standards. And it cannot be refined as the chemical standards for sterols in refined olive oils are very similar to extra virgin and a level of campesterol above 4.0% of total sterols is unacceptable.

Herein lies a problem for the Australian industry. Many varietal oils with small variations from specification which do not comply can be blended with compliant oils to result in an oil that fits the standards. However, the report identifies the variety Barnea as one with high campesterol levels, an average across samples tested of 4.5%, where the standard is 4.0%. This means that to blend this oil into specification, at least an equal volume of an olive oil with a campesterol of 3.5% or less is required.

According to the website www.boundarybend.com, Barnea is the most common variety planted in Australia, representing 41% of plantings.

We know that several large investment groves in Victoria and South Australia planted large numbers of the Barnea olive variety. The report ‘Bigger is Better at Boort’ in the Weekly Times (April 15 2009) states that of the 997,000 trees planted at the Timbercorp Boort Estate olive grove in Central Victoria, more than half are Barnea. Boundary Bend also reports that Barnea is a variety planted in the large northern Victoria groves under its management.

Coincidentally, the Survey on Compliance reports that ‘Central Victoria was the highest in campesterol. This is of concern as the majority of cv Barnea trees are grown in Central Victoria’. The implication of this is that there is a large quantity of olive oil being generated which is not extra virgin and will need to be blended with at least an equal quantity of other compliant oils.

The implication of this is that there is a large quantity of olive oil being generated which is not extra virgin and will need to be blended with an equal quantity of other compliant oils.

If we assume that 41% of Australia’s olive oil producing trees are the variety Barnea, and that Australian production in 2008 was the estimated 12,000 tonnes (AOA), as much as 4920 tonnes of olive oil produced from Barnea with high campesterol levels may not comply with international standards for extra virgin olive oil, and cannot be labelled as such.

The solution to the problem is to blend. At best this will take another 4920 tonnes of olive oil with lower than 3.5% campesterol. For any producer with a large proportion of Barnea, this could mean buying in substantial quantities of oil for blending. It will also place a premium price on olive oils with lower campesterol levels – an important incentive to have one’s olive oils tested for sterol composition.

It will also place a premium price on olive oils with lower campesterol levels – an important incentive to have one’s olive oils tested for sterol composition.

If then add the 4% of olive oils that have high linolenic acid levels, and take account of all the olive oils that are downgraded for sensory faults and high free fatty acid or peroxide levels, we may be looking at over 50% of Australian varietal production not being extra virgin by international standards.

we may be looking at over 50% of Australian varietal production not being extra virgin by international standards.

Are smaller producers being disadvantaged?

We need more accurate data and less unfounded assertion if we are to manage the Australian olive industry effectively. Testing of olive oils requiring classification should be carried out to Codex Standards (which have been adopted by the IOC) at independent laboratories and the data collated and made publicly available. We can then make informed decisions on blending and the marketing of our products.

By establishing a Code of Practice and/or a trade standard that does not require full testing to IOC Standard, the Australian Olive Association may be favouring the larger producers who have substantial quantities of varieties that may produce non-compliant oil. At the same time, having a standard to accommodate local interests which is less rigorous than international standard risks the entire industry being discredited by international buyers.

By establishing a Code of Practice and/or a trade standard that does not require full testing to IOC Standard, the Australian Olive Association may be favouring the larger producers who have substantial quantities of varieties that may produce non-compliant oil.

The ‘Australian Standards’ may also disadvantage those that ‘have done the right thing’ by planting varieties that produce oil to international standard. And who should be getting a premium for their bulk oil if it is in high demand for blending.

The ‘Extra Virgin Olive Oil’ classification is an international brand mark with standards set by the International Olive Council. It is not logical to state that Australia produces almost entirely extra virgin olive oil, and then argues in international forums that trade standards should be eased to allow ‘a significant proportion’ of currently non-complying olive oils to comply with extra virgin classification.

It is not logical to state that Australia produces almost entirely extra virgin olive oil, and then argues in international forums that trade standards should be eased to allow ‘a significant proportion’ of currently non-complying olive oils to comply with extra virgin classification.

Survey short on options

The Survey on Compliance is a useful scientific analysis. However, it is surprisingly political coming from an independent government research laboratory. The only solution it seems to recommend is the changing of international standards, an unlikely political achievement given Australia’s insignificance by volume in the world market. It offers little to help producers in overcoming the problem while this attempt to change world standards takes its inevitable slow course.

The process of changing world standards will be a protracted one. It will involve:
1. Australia developing a new standard through Standards Australia with a lengthy consultation process.
2. Adoption of the Australian standard by Food Standard Australia and New Zealand (FSANZ).
3. Garnering support from other producing countries.
4. Persuading Codex Alimentarius to change the international trade standard.
5. Persuading the International Olive Council to replace the existing International Trade Standard with the new standard.
6. Allowing a moratorium period for producers to comply with the new trade standard.

In the meantime how does Australia dispose of potentially increasing volumes of non-complaint oils as groves planted with offending varieties reach maturity?

There are no suggestions of rooting out the offending trees that produce non-compliant oil – as was suggested with the large plantations of Manzanilla. There are no suggestions on ways horticultural practice could mitigate the problem. There are no estimates of the requirements for blending, or suggestions that more widespread testing of oils should take place.

The Survey does not canvass the impact of opening up the standard to the substantial amounts of non-complying oil produced overseas, thereby increasing then worldwide volume of extra virgin olive oil and lowering prices. The implication of softening the standards in the detection of adulteration with vegetable oils is not discussed.

The Survey does not canvass the impact of opening up the standard to the substantial amounts of non-complying oil produced overseas thereby increasing then worldwide volume of extra virgin olive oil and lowering prices

If Australia is to act unilaterally and develop its own standard, it runs the risk of discrediting its olive oil product in the eyes of major importers, and at the same time opens Australia up to the importation of products that comply with local standards but are outside international standards.

The singular approach of The Survey’s recommendations appears to be doing the AOA’s bidding and potentially legitimising the sale of substantial quantities of non-compliant Australian olive oil.

This singularity is reinforced by the statement ‘it may cost exporters large amounts of money to send oil outside the country, only to have it rejected as adulterated’. It could also say – ‘to avoid incurring large costs from having oil rejected as adulterated, we recommend that all oils for export are tested to international standard prior to despatch’.

‘to avoid incurring large costs from having oil rejected as adulterated, we recommend that all oils for export are tested to international standard prior to despatch’.

And –‘Oil with exceptional characteristics such as organoleptic quality and oxidative capacity is being blended with inferior oil to achieve compliance with inappropriate trade standards’. Which could also have said – ‘blending is common practice to improve the quality and shelf-life of olive oil and to ensure compliance’.

blending is common practice to improve the quality and shelf-life of olive oil and to ensure compliance.

There are many legal and economic implications of the use of the descriptor ‘extra virgin olive oil’ when an olive oil does not comply with standards. It is not good enough to say that there is no Australian Standard, and little better to introduce a standard that ignores key chemical specifications established to detect adulteration.

Australia should simply adopt the International Trade Standard promulgated by the IOC and then get on with solving the problem of non-compliant oils. Money being spent on delegations to Codex in the arguably futile and certainly protracted attempt to substantially change standards would be better spent in making it possible for producers to fully test their oils.

The Government should be establishing an independent monitoring and compliance programme not influenced by those that may be affected by planting the wrong varieties.

The alternative is to allow the sale of olive oils that are not extra virgin, thereby undermining all the rhetoric from the AOA claiming Australia produces almost entirely ‘extra virgin olive oil’.

Australia's Largest Olive Oil Producer Troubled

2009-04-16T00:20:00.000-07:00

Timbercorp Limited has announced on its website that 'unless the company is able to reach agreement with its financiers to restructure existing debt facilities, or an alternative funding or restructure plan is implemented before 1 May 2009, there is significant uncertainty regarding the ability of the Company to continue as a going concern'.

Timbercorp owns the largest olive groves in Australia and claims to produce around 40% of Australian production of olive oil. Boundary Bend Ltd, owner of the Cobram Estate brand of olive oil, is Timbercorp's 'strategic alliance partner' for its olive projects.

In its 2008 annual report Timbercorp recorded 6,530 hectares of olives under management which produced almost 4.6 million litres of extra virgin olive oil. An oil yield of 15.41%. Oil prices achieved were between $4.53 and $4.71 per litre ($4.92-$5.12/kg). With the 2009 harvest under way, the predicted harvest is 5.5 million litres, almost 20% up on 2008.

The statement cites the cause of the credit squeeze as the unsatisfactory offers for its timber plantations which it is attempting to sell to retire debt. As far as its horticultural assets are concerned, it states that expressions of interest have been received but no formal offer has been made to date. It does not state whether the olive assets are the subject of an expression of interest.

Edible Oil Prices on The Rise

2009-04-16T00:02:00.000-07:00

The world financial situation is affecting the supply of edible oils, such as soya bean oil and palm oil, as producers apply less fertiliser and development stalls.

Analysts predict the increased consumption of fried foods in Asian countries and continuing demand for palm oil for electricity generation will mean a supply shortage in the coming year. This may increase the demand and price for other vegetable oils such as canola and sunflower oil.

This could be good news for olive oil producers which produce around 4% of the world's edible oils. Olive oil is usually around double the price of oils such as canola and sales should benefit if the price differential is reduced.

Seen as a healthier vegetable oil than competing oils, consumers may respond to the closing of prices by electing to buy the healthier product for slightly more.

House Brands Set to Grow

2009-04-15T23:40:00.000-07:00

The tightening of household budgets is leading to an increase in purchases of more economical house brands in supermarkets, at the expense of producer brands.

This has led some supermarkets to review their private labels with a view to expansion and possible rebranding.

The impact of this move on the Australian olive industry could be downward pressure on producer brand prices and consequently lower producer prices for olive oil. Producer margins for the supply of olive oil through a tender process for household brands are generally lower than returns from sales of branded products.

Internet Interest in Olive Oil

2009-03-28T18:51:00.000-07:00

Worldwide searches

Analysing the search terms used through search engines has become an important tool in gauging the interest in in products and the effect of media campaigns.

Google analytics have tracked the interest in various search permutations of olive oil since 2004 with interesting results. The interest is measured on a scale of 0-100. The worldwide search for 'olive oil' remained flat around the 80 mark until mid-2008 and since then has climbed steadily to around 95.

The searches are also divided into categories; for olive oil the most important categories are Food and Drink (50-75%), Health (10-25%) and Beauty and Personal Care (10-25%). The percentage indicates the perceptions of uses according to the searchers. With the emphasis on the health aspects of olive oil, it is surprising that this category does not rate higher.

The search for 'extra virgin olive oil' followed the same pattern with a score of 60 from 2004 with a steady rise from early 2008 to the current 90. Significantly, the Health category only recorded 0-10% interest, less than for olive oil. This could be interpreted as the consumer not getting the message about the health attributes of extra virgin olive oil.

The analysis of the regional interest shown in extra virgin over the last 5 years has Singapore top with a score of 100, USA second with 98 and Australia third with 74. New Zealand ranks number 8 with a score of 54.

Australian and New Zealand Searches

In Australia, the search for 'extra virgin olive oil' showed a steady decline from when it first registered with adequate traffic in late 2004 with a score of 80. The steady decline continued to late 2007 when it hit a low of just above 20. During 2008, traffic increased with a spike reaching 100 at the time of the publicity surrounding supermarket olive oils in October. Since then interest has abated to just above 60, 20 below the 2004 level.

Analysis of the searches by State shows the highest interest is in Victoria with a rating of 100, then New South Wales at 80 and Queensland with 57. The other States did not rate - probably a reflection of their smaller populations.

New Zealanders don't search enough for 'extra virgin olive oil' to register a score. 'Olive oil' does register and, following wild fluctuations in 2004 and 2005, has settled to a steady 50. There is a spike to 70 in early 2009, probably related to coverage given to the judging of the 2008 Olives NZ olive oil competition. The main interest comes from Wellington with a score of 100, then Auckland 95, Taranaki 86 and Canterbury 81.

The internet search analytics are a useful tool to gauge the impact of promotions and industry publicity - both positive and negative. Having lifted the interest back to 2004 levels, the challenge for the Australian industry is to commit the resources to sustain the renewed interest. For New Zealand, the challenge is to generate more traffic searching for olive oil.

Simon Field
Olive Business

2009-03-19T15:59:00.000-07:00

Import Prices Continue to Rise

The price (customs value) of imports of virgin olive oil into Australia continued to rise during February. The average price of packaged virgin olive oil was $6.21/litre, up 7% on January 2009 and 23% on November 2008.

The average bulk virgin olive oil decreased from the January figure to $5.04/litre, down 20%, and down 6% on the November 2008 figure.

After three years of steady decline from a high of around 4 Euros/kg in January 2005, the price of extra virgin olive oil has started to even out around 2 Euros/kg, or approximately $4.40/litre.

The increase in the import price and the reduction in value of the Australian dollar relative to that of importing countries in Europe and the US should favour an increase in sales of local product in Australia and an increase in exports. However, this positive outlook may be dampened by the general reduction in retail spending and a switch to cheaper cooking oils.

Imported olive oil prices take a hike

2009-03-05T03:30:00.000-08:00

HTML clipboard

Prices of virgin olive oil imported into Australia continue their upward trend according to Australian Bureau of Statistics data.

The imported price of packaged virgin olive oil reached $5.78/litre, an increase of $1.24/ litre over December and 13% above previous the highest price this financial year in August. The price of bulk virgin olive oil followed the trend and remained higher than packaged olive oil.

The price hike is probably caused by a number of factors, including the lower Australian $ exchange rate with the Euro and the switch from older olive oils being sold off in the last four months of 2008 to new season oils from the Northern Hemisphere coming on the market early in 2009.

	Imported olive oil customs value (cv) in Australian $ per litre
Month	Virgin olive oil packaged	Virgin olive oil bulk
Jul-08	4.06	4.07
Aug-08	5.11	4.11
Sep-08	4.66	5.13
Oct-08	4.79	4.24
Nov-08	5.04	5.34
Dec-08	4.54	4.86
Jan-09	5.78	5.82

Source: Australian Bureau of Statistics data

Olive Business

22/2/2009

Corrected Australian Consumption of Extra Virgin Olive Oil

2009-02-23T03:26:00.000-08:00

We have read in at least three recent publications (Australian Extra Virgin – Production Facts and Figures (www.australianextravirgin.com.au , The Olive Grower and Processor, Weekly Times Now) that Australians consume approximately 44,000 tonnes of extra virgin olive oil (EVOO) a year. This is not correct.

Australia’s consumption of olive oil is the sum of imports and local production, less the sum of exports of local production and re-exported imports.

According to the Australian Bureau of Statistics import data, the imports of olive oil for the financial year ending in June 2008 were as follows:

Virgin olive oil packaged (often referred to as extra virgin olive oil) 12,873 tonnes

Virgin olive oil in bulk (often referred to as extra virgin olive oil) 2,220 tonnes

Total virgin olive oil 15,093 tonnes

Olive oil, excluding virgin, packaged (referred to as refined olive oil) 14,931 tonnes

Olive oil, excluding virgin, bulk (referred to as refined olive oil) 1,867 tonnes

Total olive oil excluding virgin 16,798 tonnes

Note: These refined oils are usually described as ‘pure’ and ‘extra light’ on supermarket shelves.

Olive oil and their fractions including blends 333 tonnes

(referred to as olive pomace oil and blends with other vegetable oils)

Total olive oil imported 32,224 tonnes

The approximate figure of 44,000 tonnes is the total import figure added to the estimated Australian production of 12,000 tonnes giving a total consumption figure of 44,224 tonnes.

If we assume that Australian Olive Association assertion that ‘Australian olive oils are almost entirely extra virgin olive oil’, is correct, we can take 90% of Australian production as EVOO giving Australian consumption of extra virgin olive oil of around 26,000 tonnes, less exports.

Exports of virgin olive oil (which includes re-exported imports) for the financial year ending in June 2008 were 2556 tonnes.

A reasonable estimate of Australian consumption of EVOO is therefore 23,500 tonnes a year, 20,500 tonnes less that that claimed on the Australian Extra Virgin Brand website.

The website also claims that about 35% of Australian extra virgin produced in Australia is exported. The virgin olive oil exports for last financial year (2007/2008) were 2556 tonnes – including imports that are re-exported which are not separately recorded.

Official Australian olive oil production reported by the International Olive Council for 2006/2007, which would be exported in 2007/2008, is 9,000 tonnes. This gives an export percentage closer to 28% (less when re-exports are taken into account).

Olive Business

22/2/2009

Testing extra virgin olive to international standard is affordable and desirable

2009-02-13T22:48:00.001-08:00

HTML clipboard The perceived cost of testing olive oil to full International Olive Council (IOC) Trade Standard is frequently quoted as the reason for not requiring this level of testing for Australian and New Zealand extra virgin olive oils.

The Australian Extra Virgin Brand and Olives New Zealand Certification both accept testing regimes that do not include adulteration testing.

In trying to analyse the reason for this cost perception, Olive Business has made some comparisons between testing laboratories in Australia recognised by the Australian Code of Practice, and an overseas laboratory.

We have compared the costs of testing between the New South Wales Department of Primary Industry Olive Oil Testing Service (NSWDPI) and Modern Olive Laboratory in Victoria. For further comparison we have included the costs from Chemiservice laboratory in Bari, Italy. The NSWDPI laboratory and Chemiservices are recognised by the International Olive Oil Council, the former for chemical and organoleptic tests, and the latter for chemical tests.

The table shows that there is considerable difference in the cost of individual tests and the packages for testing to IOC international trade standard. The prices have been taken from online pricelists or direct quotations. The different listing of the tests in the price lists has required some interpretation, so the overall prices should be regarded as reasonably accurate estimates.

The pricing is for single samples. If multiple samples are submitted there are significant discounts which will reduce the cost of testing per sample.

Test

Testing Laboratory Cost/test single sample

¹NSW DPI Olive Oil Testing Service

Modern Olives Laboratory

²Chemiservice

Bari, Italy*

$

$

$

Fatty acid composition and trans fatty acid content
116.95

99.00

51.64

Free acidity
58.70

27.50

10.00

Peroxide value
61.50

33.00

20.00

Absorbency in ultra violet
60.35

44.00

31.00

Sterol composition
Erythrodiol + uvaol
338.60

572.00

104.00

Wax content
202.00

176.00

82.64

ECN-42 Triglycerides
111.75

150.00

104.00

Stigmastadiens
270.75

253.00

82.64

2-Glyceril Monopalmitate
111.75
(tri acyl glycerides)
100.00

(tri acyl glycerides)

82.64

Unsaponifiable matter
231.00

110.00

51.66

Organoleptic evaluation
95.65

49.50

61.98

Total cost of Individual tests
1659.00

1614.00

682.20

International trade package cost
1002.60

1606.00

682.20

Postage
4.40

4.40

50.35

TOTAL COST OF TESTING
1007.00

1610.40

732.55

Cost per litre 1000 litres
$1.00

$1.61

$0.73

Cost/500ml bottle
$0.50

$0.81

$0.37

Cost per litre
10,000 litres
$0.10

$0.16

$0.07

Cost/500ml bottle
$0.05

$0.08

$0.04

Cost per litre
100,000 litres
$0.01

$0.016

$0.007

Cost/500ml bottle
$0.005

$0.008

$0.003

Turn around (including delivery time to lab)
10 working days

7 working days

10 working days

^{1 International Olive Oil Council accredited for chemical and organoleptic tests}

^{2 International Olive Oil Council accredited for chemical tests}

^{* Converted to Australian $ at $0.50 to 1.00 Euro}

Taking the package costs as the most cost effective, the lowest cost of testing for an enterprise that produces 1000 litres of one brand of olive oil a year is 37c per 500ml bottle at Chemiservices in Italy. This comes down to 4c for a production of 10,000 litres of a single brand and 1/3c for 100,000 litres.

It may be reasonably argued that the impost of 37c on small producers producing 1000 litres will reduce profit margins, but this argument is more difficult to justify for the 4c or less per bottle for larger volumes.

These costs will be further reduced by submitting multiple samples if producers cooperate in submitting samples for testing.

Given the importance of assuring the quality of both Australian and New Zealand extra virgin olive oils to consumers, and to provide certified analysis in the case of disputes, it is difficult to understand why the custodians of quality standards do not simply adopt the IOC international trade standard as the basis of their quality branding.

Comparison of testing results between laboratories

To get an idea on the accuracy of testing from the three laboratories compared above, Olive Business sent a sample of the same refined olive oil for sterol composition testing at the three laboratories at the same time. The results are given in the table below.

The percentage variation in the testing is concerning, especially when a sterol may be close to the IOC standard limit. The variation could have one laboratory showing the oil inside the standard with another showing it does not meet the standard.

This reinforces the importance of testing samples for monitoring at two different independent IOC accredited laboratories.

Sterol Composition of refined olive as a % of total sterols
	Refined Batch 2	Refined Batch 2	Refined Batch 2	IOC Standard	% Variation
Sterol	Sample 1	Sample 2	Sample 3

Cholesterol	0.4	0.2	0.4	<0.5	50%
Brassicasterol	0.1	<>	0.1	<>	0%
Campesterol	3.8	3.27	3.6	<>	14%
Stigmasterol	1.0	0.73	1.2	< campesterol	39%
Delta-7-stigmasterol	0.3	0.27	0.4	<>	32%
Beta-sitosterol+delta-5 avenasterol +delta-5-23 stigmastadienol + clerosterol + sitostanol +delta 5-24 stigmastadienol	93.3	95.0	93.1	> 93.0	2%

Australian Extra Virgin Brand – A Double Standard?

2009-02-07T15:55:00.000-08:00

The ‘Australian Extra Virgin’ Brand (the Brand) has recently been launched under the auspices of the Australian Olive Association (AOA). The brand is underpinned by ‘The Code of Practice for The Olive Industry’ (the Code).

The Brand is only available to members of the AOA or organisations approved by them. While being a signatory to the Code is voluntary, in AOA promotional material it is referred to as ‘a Code of Practice for the industry’, and therefore has ramifications for all olive oil producers and traders. Its success or failure will have an impact on the entire industry.

The launch included a media publicity campaign and a public attack on a number of imported brands of olive oil taken from supermarket shelves and tested for the AOA by the Australian Oils Research Institute.

The website of the Brand (1) states that ‘The Code of Practice (2) guarantees the authenticity and quality of certified products and distinguishes them from imported products’.

The certification requires that ‘the products must have undergone organoleptic and chemical testing and be Australian’.

On the face of it, it is a progressive step towards improving the quality of Australian Olive Oil in the market place and increasing consumer confidence in buying the local product.

But having been so public in its general attack on ‘low grade’ imported brands – some of which were named on the

ABC 7.30 Report on 8^th October 2008 – the AOA can expect its Brand to come under intense scrutiny.

Is the Code robust enough to withstand this scrutiny or is it flawed to the extent that non-compliance will be revealed and the Brand compromised in the same way as the AOA compromised imported brands?

The Code describes a series of production and quality assurance procedures with which signatories must comply. One would assume that as Australia is a signatory to the Codex Alimentarius (Codex) (3) – the United Nations sponsored international Code covering food production and processing – the Codex standard for Olive Oil would be the starting point for compliance.

There is also a standard promulgated by the International Olive Council (IOC) to which Australia has observer status – and by implication subscribes to the IOC ‘Trade Standard Applying to Olive Oils and Olive-Pomace Oils’ (4).

International standards – Codex Alimentarius and IOC Trade Standard.

Standards for olive oil in both these documents require that the product undergoes sensory analysis by a recognised tasting panel and a number of chemical tests are carried out by a recognised laboratory. Recognition of tasting panels and chemical testing laboratories is granted by the IOC on an annual basis and a current list can be obtained from their website (5).

The laboratories recognised for chemical testing are divided into two categories: ‘public or private laboratories that issue test certificates at the request of third parties, and laboratories belonging to olive oil companies that analyse their own oils’.

Sensory (Organoleptic/Taste) Testing

From November 2007 to November 2008 of IOC recognised sensory panels did not list an Australian panel. One Australian panel was listed in the 2006/2007 listing but was subsequently delisted. It can therefore be argued that during the period when the first olive oils bearing the Brand appeared there was no capacity in Australia to officially certify that an olive oil meets international standard and that any certification must be supplied by one of the listed overseas panels.

In the new listing of recognised panels published by the IOC on 1 December 2008, the Australian Panel has regained its recognition for the next year.

The Australian Extra Virgin Code of Practice requires that the olive oil must ‘have been assessed organoleptically by a person or persons accredited by The Australian Olive Association Ltd or in accordance with processes determined by the Australian Olive Association Ltd……………….’

Information provided by the AOA states that for the Brand ‘The organoleptic testing to be done by a panel of five, with one person having AOA Level Two training and the other four having Level One (or equivalent)’.

It appears that to achieve Levels 1 and Levels 2 training the tasters must have completed Course 1 and Course 2 of training provided under the auspices of the AOA. Course 1 – Understanding Extra Virgin Olive Oil - is a 6 hour course and Course 2 – Principles and Practices of Olive Oil Blending – is a 3.5 hour course. There does not appear to be any testing of a participant’s tasting performance in either course (6).

Given this level of training it would be difficult to argue that the AOA recognised tasting panels have the authority to officially classify olive oils to international standard and thereby determine the diminished financial return from large quantities of olive oil which may be downgraded.

It is fundamental to international sensory testing that tasting of olive oil is conducted by a panel of at least 8 panellists to eliminate personal taste variations. The IOC accredited panels undertake a number of tests each year to ensure that their conclusions conform to international benchmarks. The IOC also requires that a minimum of 8 panellists conduct any tasting to classify olive oils.

Given the serious financial loss resulting from olive oils being classified as virgin or lampante, and not extra virgin, there should be no compromise in establishing this testing regime in Australia.

Any shortfall in capacity in Australia to undertake the numerous sensory tests required each year can be overcome by recognising compliance certificates issued by overseas IOC accredited sensory testing panels.

Any recognition of an individual or individuals by the AOA to undertake the sensory testing outside the IOC recognised panels brings into question the integrity of sensory assessment and therefore the Brand which relies on it.

According to media reports, some of the imported extra virgin olive oil brands named by the AOA as not meeting international standards were downgraded on sensory/taste tests. Unless the taste tests were carried out overseas by IOC recognised panels, these tests have no validity. The same can be said of the taste testing of the Australian brands which were vaunted as meeting all standards.

Chemical Testing

The purity criteria for olive oil listed by the IOC Trade Standard includes the following tests:

Fatty acid composition as determined by gas chromatography
Trans fatty acid content
Sterol and triterpene dialcohol composition
Desmethylsterol composition
Total sterol content
Erythrodiol and uvaol content
Wax content
Maximum difference between the actual and theoretical ECN42 triacylglycerol content
Stigmastadiene content
Content of 2-glyceryl monopalmitate
Unsaponifiable matter

These tests are used to determine any contamination/adulteration of extra virgin olive oil with refined olive oils or other vegetable oils.

There are also a series of quality tests which are indicators of the stability of the olive oil, and residues. These tests are:

Free acidity
Peroxide value
Absorbency in ultra-violet
Moisture and volatile matter
Insoluble impurities in light petroleum
Trace elements (iron, copper)

The chemical testing criteria for Australian Extra Virgin as stated in the Code is ambiguous.

In the introduction it states that ‘It supplements the provisions of the Food Standards Australia New Zealand Code and related legislation, The Trade Practices Act, State and Territory fair trading food safety and health legislation, and international rules and codes with similar aims, such as those of the International Olive Council and the Codex Alimentarius Commission’.

This statement (and in particular the use of the word ‘supplement’ ) implies that the IOC and Codex olive oil standards are the basic requirement for signatories to the Code and that any olive oils carrying the Brand must have provided testing data from internationally recognised laboratories to prove compliance to all the tests.

The ‘Quality and Labelling Guidelines’ for Australian Extra Virgin’ defined in the Code only require the following chemical tests:

Free fatty acid contents
Peroxide value
Ultra-violet absorbency tests

This list only includes three of the quality criteria tests in the IOC/Codex chemical tests and there are no tests for adulteration or contamination with refined olive oils and vegetable oils. The ABC 7.30 Report based on AOA findings made a number of assertions regarding the presence of refined olive oils and other vegetable oils in imported brands.

If the only tests required for the Australian Extra Virgin Brand are the three quality criteria listed in the Code, it is only a matter of time before a Brand oil is found not to comply with international standards. The olive oil supply chain in any producing country, including Australia, involves a number of steps where varietal variation, contamination, adulteration or deterioration can occur:

Some olive varieties in Australia are known to produce oil which has above standard linolenic acid levels – one of the indicators of contamination with other vegetable oils.
Some olive varieties in Australia also produce oil which has above standard sterol levels, especially campesterol.
Contamination may occur in transport, storage or packing where other vegetable oils or refined olive oils have been handled.
All olive oils, imported or Australian, will deteriorate over time. This deterioration is accelerated when the product is subjected to adverse conditions of heat and light in storage, transit or on retail shelves. The chance of this is increased with the conditions encountered with exports.

The risk of contamination is recognised by one brand of Australian Extra Virgin Olive Oil in a spray can which carries the following information on the label ‘may contain traces of soya bean lecithin’. The brand is a signatory to the Code.

One explanation for the Code not requiring the full international trade standard testing regime is that the cost of testing will be a disincentive to participate. However, compromising the integrity of Australian Extra Virgin Olive Oil through adopting sub-standard testing requirements may in the long term extract a far greater cost from the Australian Olive Industry.

Recognised Laboratories

There are currently two Australian laboratories recognised by the AOA as competent to test olive oils for the Brand.

It is reasonable to propose that any chemical analysis used as a basis for certification by the Code, or for assessment of breaches, should be undertaken by an independent and IOC recognised laboratory.

Any determination made by the Code compliance committee will have to withstand legal scrutiny of the testing regime when disputes arise. This reinforces the imperative to ensure that all sensory and chemical testing is independent and to International Olive Council and Codex Alimentarius standard.

It would make sense to recognise all IOC recognised chemical laboratories worldwide as competent to undertake testing for the Code. Currently testing certificates issued by overseas IOC recognised laboratories would appear to be ineligible for compliance with the Code.

Breach of the Code and Product Recall

The Code states that ‘Any signatory may initiate the testing of an olive product’. This validates the monitoring and testing of competing brands of any of the Code signatories. This could be used as a tool to gain competitive advantage and discredit competing brands. This practice could lead to vexatious claims.

In such an instance the independence of members of the Code Compliance Committee and of the testing laboratories would seem of paramount importance.

In the provisions for a breach of the Code, it states: ‘The Committee shall take no action in respect of a first breach of the Code arising as a direct result from non-compliance of olive products provided the signatory had obtained a certificate of compliance from the supplier in respect of the offending supplies’. There is no stipulation as to where the certificate of compliance should be obtained or what tests the certificate of compliance should cover.

The Code therefore does not require immediate product recall or suspension of non-compliant products. After a testing process that could take up to two months, the offending brand is required to implement an effective compliance programme.

The non-complying product could be on retail shelves for considerable time, and if detected by other monitoring programmes not associated with the AOA could bring adverse publicity and compromise the Brand. The negative publicity associated with this may have consequences for all Australian olive oils that bear the Brand.

Guarantees and Liability

The website for ‘Australian Extra Virgin’ states that ‘The Code of Practice guarantees the authenticity and quality of certified products…………..’

This guarantee has far-reaching legal implications. If a certified product is found not to comply with international standards recognised in Australia, as the owner of the Brand, The Australian Olive Association may be liable for the failure of the guarantee. With a testing regime that does not appear to meet the requirements of international trade and Codex standards, this is a very real possibility.

The liability may also extend to the Compliance Committee and those accredited by the AOA to undertake sensory and chemical testing to international standard.

Conclusions

As it stands, the testing regime for the Code of Practice underpinning the Australian Extra Virgin Brand appears to be considerably less rigorous than that required for international trade in olive oil.

The accreditation system for sensory analysis and tasters falls well short of the requirements for recognition by the International Olive Council.

The chemical testing required does not include contamination/adulteration tests.

The independence of the testing process is questionable.

To be credible, the Brand should have as its minimum requirement that all branded oils meet all international trade standards and provide testing certification by independent laboratories and tasting panels recognised by the International Olive Council to prove this.

All overseas IOC recognised laboratories and sensory panels should be accredited by the AOA Code of Practice and classification certificates issued by them accepted as valid.

The additional selling point for the brand will be that it is authentically Australian and fresh.

To protect the interests of consumers, Australia needs a system of testing olive oils for compliance that is independent and meets international trade standards.

Actions taken on non-compliance should protect consumers while being sensitive to possible collateral damage to the production and retailing of olive oil in Australia.

In the words of the AOA President in his address to the AOA Conference in Brisbane 2003, ‘The approach to regulation of olive products needs to be careful. We do not want consumers ever thinking that there is something ‘wrong’ with olives or olive oil’.

Simon Field

6/1/2009

Reference Documents and websites

(1) www.australianextravirgin.com.au

(2) http://australianolives.com.au/e107_files/downloads/Code_of_Practice/Code%20of%20Practice%20-%20Aug%202008.pdf

(3) Codex Standard 33. http://www.codexalimentarius.net/web/standard_list.jsp

(4) http://www.internationaloliveoil.org/downloads/NORMAEN1.pdf

(5) http://www.internationaloliveoil.org/web/aa-ingles/corp/AreasActivitie/chemistry/laboratories.html

(6) http://www.australianolives.com.au/e107_plugins/content/content.php?content.127

Simon Field is an Australian olive oil producer and trader. He is a former Executive Director of the Australian Institute of Agricultural Science. As an olive oil trader he supplies Australian olive oil to a number of Australian brands. He has a commercial interest in an Australian olive oil mentioned on the ABC 7.30 Report and the subsequent discussion of compliance with International Olive Council specifications for Australian olive oil.

Australian hopes on reducing EU tariffs and subsidies dive

2009-01-30T21:09:00.001-08:00

The statement ‘My first duty is to support European farmers’ by the European Union Agriculture Commissioner, Mariann Fischer Boel, reported in the Weekly Times is cold comfort for Australian olive oil producers. While not directly referring to olive oil production, it represents a hardening of policies against free trade across the globe as politicians respond to pressure to reverse their slowing economies.

This attitude, as well as the relatively small quantity of oil produced in Australia (less than 1% of world production), would suggest that continuing approaches to the EU to remove imports tariffs and export subsidies for olive oil would be futile until the current financial situation has improved.

The money that supports this lobbying could be better spent on consolidating and expanding the Australian industry, increasing consumption of local product and replacing imports of all classifications of olive oil.

The investment in the promotion of Australian EVOO should be based on its meeting international trade standards and being competitively priced against imports and other competing vegetable oils such as canola.

Simon Field
30/1/2009

Coles offer Australian EVOO at $3.99 for 500ml

2009-01-30T20:49:00.000-08:00

Coles supermarket is offering its own brand of Australian Extra Virgin Olive Oil for $3.99 per bottle – three dollars less than Woolworths Select Brand ($6.99) in an adjacent Safeway (Woolworths) store. At this price the Coles product is excellent value and undercuts many of the imported brands.

The price comparison of Australian Extra Virgin Olive Oil below was conducted on 30 January at Coles and Safeway supermarkets in the same arcade in a Melbourne suburb.

Coles has 10 Australian EVOO Brands on the shelves while there are 7 on Safeway shelves.

Australian EVOO Brand	Shelf price
500ml bottle	Coles	Safeway
	$	$
Coles Brand	3.99
Jingilli	7.50	7.99
ProChef	7.79
Red Island	8.49	7.99
Ollo	8.99	7.85
Cobram Estate	8.99	5.99
Olive Grove	9.25
Woolworths Select		6.99

375ml bottle

Viva	5.00	5.24
Always Fresh	5.49	5.49
Cobram Estate	5.99
Kyneton	7.29

Virgin Olive Oil Imports Up, Prices Trend Down

2009-01-12T02:25:00.000-08:00

According to Australian Bureau of Statistics data the price of virgin and refined olive oils imported into Australia over the last three years has shown a downward trend. This is good for consumers and not so good for producers.

The import price is generally a benchmark for price setting of olive oils in Australia. Although there is no data available for Australian prices, it is reasonable to assume that the prices will follow the trend of imported olive oils if they are to be competitive.

The graph below shows that since the 2005/2006 financial year the price of virgin olive oils has dropped from $6.04/kg to $5.14/kg in 2007/2008 for packaged olive oil and from $7.48/kg to $5.28/kg for bulk. The first five months of the current financial year have shown a slight increase for packaged olive oil to $5.30/kg while bulk has continued to fall to $5.22/kg.

In the three year period imports of virgin olive oil have risen by 26.82%.

The price trend for refined olive oil is also downward with the price for packaged products declining from $5.59/kg in 2005/2006 to $4.89 in 2007/2008. A slight rise to $5.20/kg is shown for the first five months of the current financial year. Bulk refined olive oils dropped from $5.55/kg to $4.37/kg over the same period with a slight rise to $4.62 to November this year.

The volume of imported refined oils has declined by 9% during the three year period. This is reflected in the decline of the proportion of refined olive oil imported from 61% in 2005/2006 to 52% in 2007/2008

Simon Field
Olive Business
12/1/2009

World Olive Oil Prices Down, Crop Estimates Up / Australian Import Prices Rise

2009-01-08T01:53:00.000-08:00

World Olive Oil Prices Down, Crop Estimates Up

In its latest market commentary the International Olive Council reports that olive oil prices are continuing to fall.

Compared with the same time last year the prices for extra virgin olive oil were 14% lower in Spain, 22% lower in Italy and 30% lower in Greece.

At current exchange rates the Jaen (Spain) price of €2.19/kg for extra virgin olive oil in November converts to AU$4.56/kg or AU$4.15/litre.

The prices for refined olive oil were also lower by 16% in Spain and 11% in Italy. The Jaen ex-refinery price is €2.19/kg, the same as the extra virgin price.

Estimates for the 2008/2009 suggest that 2.866 million tonnes of olive oil will be produced, 202,000 tonnes more than last year.

Australian Import Prices Rise

According to the Australian Bureau of Statistics data, packaged virgin olive oil import prices increased by 9% from November 2007 to November 2008 to AU$5.54kg or $5.04/litre. Bulk prices rose by 33% to 5.87/kg ($5.34/litre).

Packaged refined olive oils rose 21% to $5.61/kg ($5.11/litre), with bulk refined oils rising by 20% to $4.91/kg (4.47/litre).

This substantial rise in prices cannot be attributed to currency exchange rates as the value of the Australian dollar in comparison to the Euro in November 2007 was the same as November 2008 at 0.60 Euro to the dollar.

Simon Field
Olive Business
8/1/2009

Australian Sensory Panel Regains Recognition / Testing Your Olive Oil to International Trade Standard in Australia and New Zealand.

2008-12-04T03:41:00.000-08:00

Good news for the Australian Olive Industry. The Australian Olive Oil Sensory Panel based at the Wagga Wagga Agricultural Institute in New South Wales has regained its international recognition by the International Olive Council. The New Zealand panel has retained its recognition.

This means that olive oils can again be fully tested to International Trade Standard at the NSW facility for the next year. It is the only facility in Australia that has IOC recognition for sensory and chemical testing.

However, for New Zealand, the comments below are still relevant, as are observations on the validity of test results published over the past year from Australian and New Zealand testing facilities.

Olive Business 4 December 2008

www.olivebusiness.com

For further information contact Simon Field on 03 9387 9919 or email salsi@olivebusiness.com

Testing Your Olive Oil to International Trade Standard in Australia and New Zealand.

If you want your olive oil certified as extra virgin in Australia and New Zealand, you will have to send it overseas for testing.

As signatories to the Codex Alimentarius, the standards for olive oil in the Codex apply in Australia and New Zealand (Codex standard 33). The standard for trading across international boundaries is described in the Trade Standard published by the International Olive Council (IOC). These standards are available at http://www.codexalimentarius.net/web/standard_list.jsp and

http://www.internationaloliveoil.org/downloads/NORMAEN1.pdf respectively.

To test imported and locally produced olive oils and to take action against those that do not comply, the oil must be tested by competent authorities. Competent authorities are those which are firstly approved by the country in which the testing is taking place, and secondly recognised by the International Olive Council (IOC). This recognition, bestowed annually, requires the laboratories meet a standard of analysis and prove competence through analysing test samples distributed by the IOC.

There are two testing regimes for olive oil, one chemical and the other sensory (taste). Currently Australia has one IOC recognised chemical testing laboratory, the Oil Research Laboratory of NSW Department of Agriculture, and no recognised tasting panel. New Zealand has a recognised tasting panel and no recognised laboratories.

Therefore, olive oils cannot be fully tested and classified to international trade standard in either country. To be valid any full classification would have to be carried out overseas.

This calls into question the validity of all classifications bestowed by laboratories in Australia and New Zealand, including the analyses of olive oils taken from supermarket shelves and tested on behalf of the Australian Olive Association. The chemical testing may be valid, the taste testing almost certainly is not.

In following up on the claims made by the AOA of incorrect labelling and adulteration of olive oils the Australian Consumer and Competition Commission (ACCC) will need to be mindful of this and require overseas testing of all samples, including Australian brands which the AOA claims are fully compliant.

Furthermore, issuing of classification certificates by laboratories not recognised by the IOC that may imply the classification is to international standard for olive oil should be as unacceptable as the incorrect labelling of olive oils on supermarket shelves. There may also be legal implications for producers using these certificates to claim authenticity should there be a dispute over olive oil quality.

A list of IOC recognised laboratories is available at:

http://www.internationaloliveoil.org/web/aa-ingles/corp/AreasActivitie/chemistry/laboratories.html

Olive Business 25 November 2008

www.olivebusiness.com

For further information contact Simon Field on 03 9387 9919 or email salsi@olivebusiness.com

Market Outlook for Olive Oil – November 2008

2008-12-04T03:39:00.000-08:00

The World

Harvesting is underway in Europe and with favourable rainfall in most regions the production outlook suggests a good or very good harvest, according to the International Olive Council (IOC).

Consumption patterns seem to be normal.

Price movements are downwards or stable with total transactions well below expectation.

The expected rise in virgin olive prices which usually precedes the new harvest in Europe have not materialised and prices have continued to fall or levelled off. Compared to the same time in 2007, the prices for extra virgin olive oils are 1% lower in Spain, down 15% in Greece and down 15% in Italy.

Prices for refined olive oil were 4% lower in Spain, 2% lower in Italy and stable in Greece. (IOC)

These trends suggest an increased carryover of stocks in Europe and with an expected above average harvest, further downward pressure on prices.

The world economic situation, with the USA officially in recession and most of the major olive oil consuming countries in Europe also in recession, will affect retail sales which can be expected to fall, putting further downward pressure on prices.

The spectacular fall in the price of crude oil will ease the pressure to find alternate energy sources such as biofuel from vegetable oils. This should reduce the demand for canola and soya bean oils, making these oils cheaper. International commodity prices for grains and their vegetable oils will therefore follow the downward trend of the world financial markets. The expected lower prices of vegetable oils will flow through to supermarket shelves and foodservice, putting downward pressure on competing oils such as olive oils.

On the positive side, currency exchange rates have seen the rise in the US dollar which will favour imports into the country which has the highest olive oil imports outside the European Union (EU).

Australia and New Zealand

In the high volume bulk and supermarket olive oil trade, the rapid fall of the Australian dollar will tend to increase the cost of imported olive oils. This may be offset by the prices in the EU falling over the next year.

However, over the last year, with the exception of refined olive oil in bulk, import prices at the wharf have fallen. The average price (customs value) of packaged virgin olive oil imported into Australia in October was $5.26/kg (4.78/litre), down 2.5% on the same period last year. Bulk virgin olive oil averaged $4.66/kg (4.24/litre), down 10.4%, packaged olive oil averaged $5.12/kg (4.66/litre), down 5%. Against the trend, bulk olive oil increased by 16.5% to $4.80/kg (4.37/litre).

Consumption of olive oil may decline, especially if the prices do not fall to compete with the falling prices of other vegetable oils both in supermarkets, manufacturing and foodservice.

Supermarkets have already indicated a rationalisation of olive oil brands offered and the general trend in retail is to reduce inventory as consumer demand declines.

On the positive side, the falling Australian dollar will improve the potential for exports to the US and EU. This will be offset by increased stock in Europe competing for the US and EU markets.

In the current production cycle, shortage of water for irrigation will affect the yields in some of the largest groves in south eastern Australia. In Western Australia the cropping season is expected to be good, after the alternate bearing affected 2007 harvest and adequate rainfall.

A recent report in The Australian indicates that the large Managed Investment Scheme developments in the olive industry are over. Both Timbercorp and Great Southern Plantations, who have substantial investments in olive groves, are trading at less than 5% of their peak values in 2006, with more than $1.7billion stripped from their combined market capitalisation. Both companies are reportedly selling off assets, including olive groves, to reduce debt. The result will be a significant slowing of expansion in all aspects of the olive industry.

These factors lead to the price expectation for large volume Australian extra virgin olive oil being downward to compete with high international stocks of olive oil and low vegetable oil prices. The price for refined olive oil is expected to increase as most of it is imported and affected by the poor Australian dollar to Euro exchange rate.

Exporters should be aware that there have been reports of problems with International Letters of Credit (ILC) not being honoured as importers lack liquidity or believe they have paid too high a price as prices fall.

For the small volume and boutique market the outlook is one of increasing number of brands competing for a declining market with strong downward pressure on prices. While pre-Christmas spending appears to be equal to 2007 in boutique stores, the expectation is that there will be a marked slowing in early 2008 as more households come under financial pressure.

The food service and restaurant trade have reported fewer diners when Christmas festivities would be expected to boost covers. Corporate spending on festive season activities, and entertainment in general, has been severely curtailed. So olive oil consumption in the foodservice sector can also be expected to decline

The general outlook in Australia and New Zealand is for a tightening of the market resulting from declining local consumer demand and higher stocks in the EU. With a harvest which is expected to be higher than 2007, and lower competing vegetable oil prices, there will be downward pressure on prices without the compensating increase in volumes traded.

Production Costs

Producers will get a little relief from contracting margins with some expected decreases in production costs.

Over the next 6 months, all the inputs derived in some way from crude oil will start to cost less. These include fertilisers, pesticides, herbicides and other chemicals.

Fuel costs have already come down substantially so harvesting and transport in general should cost less.

Plastic and other petrochemical based packaging should also be cheaper.

Increased unemployment may lead to less costly labour. However, governments that have allowed seasonal labour migration may curtail this to increase the employment of local labour.

The lower commodity prices for iron ore should lower the cost of steel and other metals used in the manufacture of machinery. Add to this increased the competitiveness in all sectors, the cost of machinery and servicing can be expected to come down.

In Australia, with over 10 years of dry seasons, water will continue to be a major issue and prices will continue to trend upwards.In summary, expect lower prices, price competitively, maximise margins by increasing efficiency and promote, promote, promote.

Simon Field

Olive Business November 2008

www.olivebusiness.com

Testing Your Olive Oil to International Trade Standard in Australia and New Zealand.

2008-11-24T23:34:00.000-08:00

If you want your olive oil certified as extra virgin in Australia and New Zealand, you will have to send it overseas for testing.

Therefore, olive oils cannot be fully tested and classified to international trade standard in either country. To be valid any full classification would have to be carried out overseas.

A list of IOC recognised laboratories is available at:

http://www.internationaloliveoil.org/web/aa-ingles/corp/AreasActivitie/chemistry/laboratories.html

Olive Business, 25 November 2008

For further information contact Simon Field on 03 9387 9919 or email salsi@olivebusiness.com

Extra Virgin Olive Oil Savantes 2009

2008-11-23T02:17:00.000-08:00

Fortnum and Mason, London, UK, 27-29 May
Seville, Spain, 19-21 May

Fortnum and Mason, one of the world’s most prestigious food stores, will be the venue for the London Savantes programme in 2009. Chosen because of it’s commitment to excellence, the commercial setting of Fortnum and Mason will provide tasteful surroundings and delicious food to compliment some of the best olive oils the world has to offer for tasting.

In Spain, the leading olive oil producing country in the world, beautiful Seville will again host the Savantes programme. Surrounded by rolling plains of olive groves, Seville is steeped in cultural and food history, making it the perfect venue to explore the taste of leading olive oils from around the world.

The Savantes programme attracts those with an interest in the olive industry who realise the importance of keeping up to date with trends in the processing, taste and uses of extra virgin olive oil. Participants include chefs, retailers, wholesalers, traders, journalists, producers, and processors from the Northern and Southern hemispheres.

Savantes emphasises the culinary uses of the different flavours, styles and intensities of a wide range of olive oils which have formed the basis for many of the world’s healthiest cuisines.

In contrast with many technical olive oil classification training programmes, the emphasis is on the commercial differentiation, taste and culinary uses of extra virgin olive oils.

The 2009 programme will be led by internationally recognised culinary and olive oil expert Judy Ridgway. Author of ‘Best Olive Oil Buys Round the World’ and many cook books and travel articles, Judy travels the world keeping up to date with taste and production trends.

Judy will be supported by farmer entrepreneur Simon Field who founded Savantes in 2001. As producer, trader, marketer and author of technical olive handbooks, Simon brings a commercial and market perspective to the programme.

To give a regional perspective in each of the locations in 2009, local experts will assist with some sessions covering culinary uses.

For further information and booking go to www.savantes.com/savantes or contact Simon Field on +61 3 9387 9919

13 September 2008

Test	Testing Laboratory Cost/test single sample
	¹NSW DPI Olive Oil Testing Service	Modern Olives Laboratory	²Chemiservice Bari, Italy*
	$	$	$
Fatty acid composition and trans fatty acid content	116.95	99.00	51.64
Free acidity	58.70	27.50	10.00
Peroxide value	61.50	33.00	20.00
Absorbency in ultra violet	60.35	44.00	31.00
Sterol composition Erythrodiol + uvaol	338.60	572.00	104.00
Wax content	202.00	176.00	82.64
ECN-42 Triglycerides	111.75	150.00	104.00
Stigmastadiens	270.75	253.00	82.64
2-Glyceril Monopalmitate	111.75 (tri acyl glycerides)	100.00 (tri acyl glycerides)	82.64
Unsaponifiable matter	231.00	110.00	51.66
Organoleptic evaluation	95.65	49.50	61.98

Total cost of Individual tests	1659.00	1614.00	682.20

International trade package cost	1002.60	1606.00	682.20
Postage	4.40	4.40	50.35
TOTAL COST OF TESTING	1007.00	1610.40	732.55

Cost per litre 1000 litres	$1.00	$1.61	$0.73
Cost/500ml bottle	$0.50	$0.81	$0.37
Cost per litre 10,000 litres	$0.10	$0.16	$0.07
Cost/500ml bottle	$0.05	$0.08	$0.04
Cost per litre 100,000 litres	$0.01	$0.016	$0.007
Cost/500ml bottle	$0.005	$0.008	$0.003
Turn around (including delivery time to lab)	10 working days	7 working days	10 working days