One Enterprise Controls Australian Olive Oil Market

In its commentary about the Australian olive oil industry the USITC Report stated ‘the olive-growing industry structure is very concentrated, with an estimated 85 percent of production controlled by about 40 large-scale producers. One company, Boundary Bend Limited, accounts for about half of Australia’s production’.

This prompted Olive Business to explore just how much control of the Australian industry is vested in one enterprise.

According to the Chairman’s Report to the Boundary Bend Limited AGM the company produces 68% of the total olive oil produced in Australia, is the largest exporter at 65% and is the largest marketer of Australian olive oil with control over 80%.

In the two main supermarkets, Woolworths and Coles, through its brands Cobram Estate and Red Island, the company accounts for 80% of retail sales of Australian olive oils. The closest competitor is the supermarket’s own brands at 10% in each case.

In the research funded by industry and the Rural Industries Research and Development Corporation in 2011-2012, employees of Boundary Bend are listed as the research managers for 4 of 9 projects – the only projects vested in a private company.

The commercial and political implications of this dominance are profound for Australian producers. It will be difficult for any other producers to bid effectively for supermarket supply contracts as securing adequate Australian olive oil will be a challenge. Prices paid for domestic oil supplies from smaller producers can be driven down by Boundary Bend as other domestic buyers do not have retail supply contracts.

Given that research will in future be funded by levies on production, the high contribution to the research funds by Boundary Bend will justify greater say in which projects are funded. The same applies to the political agenda as membership subscriptions to the peak representative body, the Australian Olive Association, are also based on production levies.

Judging Own Oils

Being a judge in a competition in which one enters one’s own extra virgin olive oils seems to be the norm in Australia. It is a practice which is frowned upon when discussed with the general public where the apparent vested interest is ethically unacceptable. Chief judges and organisers justify the practice by stating that the pool of experienced judges in Australia is small and in the shows it is ensured that judges do not judge their own oils.

Five judges on the Melbourne Fine Food Show panel had a direct or indirect interest in oils entered. One judge entered an oil in every class which would make it difficult to ensure that the judge did not score their own oil. Notably some judges who regularly enter their olive oils in competitions did not enter their oil in the Melbourne Show in which they were judging.

Some industry competitions such as the Australian Olive Association no longer publish the list of judges, possibly to avoid criticism of apparent vested interests and bias. Surely the simplest way to avoid such criticism is to rule that judges cannot enter oils with which they have an association.

Per Capita consumption of Olive Oil in US continues to Rise

Data presented at the recent Savantes programme in New York shows that per capita consumption of olive oil in the USA continues to rise steadily.

The consumption per person is approaching I litre per person.

United Kingdom Olive Oil Consumption is Flat

Data presented to Savantes in London in early March shows that consumption of olive oil in the United Kingdom has been around 1 litre per person for the last five years.

There was a slight rise to 1.2 litres in 2011 which can probably be attributed to lower prices.

Olive Oil Production Continues Decline Against Other Vegetable Oils

Updated data from the USDA shows that the percentage of olive oil produced continues to decline as a proportion of total vegetable oil worldwide. In six years since 2007 the percentage has dropped from 2.4% to 2.0%.

East Coast Biggest Users of Olive Oil in USA

In an analysis presented to Savantes New York in February, Eryn Balch, Executive Vice President of the North American Olive Oil Association, revealed that the Eastern States consume 54% of all classifications of olive oil in the USA.

Based on the US Census Divisions, the data showed the consumption as New England Division – 9%, Middle Atlantic 23% and South Atlantic 22%. By comparison the West Coast which is covered by the Pacific Division consumed 10%.