Rain in Spain will Affect World Markets

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

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