Year 12 | 20 January 2020 | TO ENTER | TO REGISTER

U.S. International Trade Commission investigates the olive oil industry

After a December public hearing, it's harder to understand the future of the US extra virgin olive oil market and the olive oil marketing order. Testimony of some key witnesses will provides a clearer idea

Some months ago the U.S. International Trade Commission (USITC) has launched an investigation into the global competitiveness of the U.S. commercial olive oil industry.
The investigation, called “Olive Oil: Conditions of Competition between U.S. and Major Foreign Supplier Industries”, was requested by the U.S. House of Representatives Committee on Ways and Means in a letter of September 12, 2012.

In its letter, the Committee stated: "The U.S. commercial olive oil industry has grown rapidly over the last decade, employing modern agriculture technologies and research to capture the growing domestic demand for olive oil.... U.S. consumption of olive oil has increased approximately 40 percent in the past ten years. Although domestic production has increased, the vast majority of U.S. consumption is satisfied by imports."

As requested, the USITC, an independent, nonpartisan, factfinding federal agency, will provide, to the extent possible, information and analysis on the major suppliers of olive oil, particularly Spain, Italy, and North African countries, as well as the United States. The report will cover the period 2008-2012 and to the extent possible will provide:
- an overview of the commercial olive oil industry in the United States and major supplier countries, including production of olives for olive oil processing, planted acreage and new plantings, processing volumes, processing capacity, carry-over inventory, and consumption;
- information on the international market for olive oil, including U.S. and foreign supplier imports and exports of olive oil in its various forms, olive oil trade between the European Union and North African countries, and a history of the tariff treatment and classification of olive oil;
- a qualitative and, to the extent possible, quantitative assessment of the role of imports, standards and grading, prices, and other factors on olive oil consumption in the U.S. market; and
- a comparison of the competitive strengths and weaknesses of the commercial olive production and olive oil processing industries in the major producing countries and the United States, including factors such as industry structure, input production costs and availability, processing technology, product innovation, government support and other government intervention, exchange rates, and marketing regimes, plus steps each respective industry is taking to increase its competitiveness.

The USITC will submit its report to the Committee by August 12, 2013.
On December 5, 2012, the USITC held a public hearing in connection with this investigation on December 5, 2012. What happened during this public hearing? The testimony of the witness will help us to understand.

“Fraud has plagued the olive oil business for thousands of years and continues to this day – said Tom Mueller, journalist and author of the book “extra Virginity” - olive oil quality, good and bad, is not matter of nationalism. Some extremely bad oil is made right here in the USA: my book describes several high profile American fraudsters. And much of world's finest olive oil is made by the Mediterranean, especialli in Spain, Italy and Greece. Americans consumers who buy these false extra virgins are being duped.”

“The Olive Center's three reports on olive oil quality – said Selina Wang, Research Director of the UC Davis Olive Center – have analyzed a total of 207 samples purchased from supermarkets and food service distributors. These studies found that 65% of the Mediterranean olive oil samples did not meet the IOC's minimal extra virgin standards, and that two of the samples were adulterated with canola oil. UC Davis conducted both IOC chemical and sensory analysis. The NAOOA's quality monitoring program does not include the IOC sensory standard.”

“Imports of olive oil account of the overwhelming majority – or about 98% - of growing US consumption - said Eryn Balch, Executive Vice President of NAOOA (North American Olive Oil Association) – NAOOA's ongoing mission is to ensure that imported olive oil is authentic and properly labeled. The common denominator in all of the NAOOA's efforts in this respect in the international standards overseen by the IOC. The problem is that conclusions of the UC Davis studies rely primarily on sensory testing, which of all the test methods is the one that is subjective and can produce variable results.”

“The process of adopting a federal marketing order is beneficial for both domestic producers and importers – said Alexander Ott, Executive Director of AOOPA (American Olive Oil Production Association) – If Europe's olive oil industry has benefited from an import quality regulation why shouldn't the US go ahead and protect the US consumer from both fraud and poor quality olive oil. To date there has not been a marketing order submitted or has one been drafted for submission so there is no marketing order entity that would have an interest in the farm bill. Yes, we are discussing a potential order with growers but the hysteria over potential federal marketing oderde is somewhat humorous.”

“The combination of a Mediterranean climate, productyion expertise, and entrepreneurial spirit provide the foundation for California to capitalize on the growing opportunities the market has to offer – said Mechel S. Paggi, Director Center for Agricultural Business, Califonia State University - Unlike their foreign competitors, California producers receive little government support in their effort to grow the industry.”

Fraud, olive oil quality, competition with European producers – these are the key problems, that the public hearing addressed. Who will win? Which side will prevail? No one knows at this point, but at least we now understand better who the players are in the competition: the NAOOA, which represents importers and distributors, and the AOOPA, representing growers and processors.

This is nothing new for Europeans. In fact, we’ve seen this competition every day, for decades. Good luck, USA, and welcome to the real world of the olive oil business!

by Alberto Grimelli
07 january 2013, World News > America