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The true scandal about false olive oil that shocked the Americans. Unfair competition for honest producers

The NAOOA filed a lawsuit against Gourmet Factory, accusing it of harming both consumers and competing companies with its faux oil. The legal complaint is a model of force and clarity

On February 6th, 2013, the North American Olive Oil Association (NAOOA) filed suit against Kangadis Food Inc., a New York-based seller of olive oil and related products better known as The Gourmet Factory. The suit accused Gourmet Factory of “unlawful, deceptive and misleading” practices, alleging that its “100% Pure Olive Oil” sold under the Capatriti brand was actually olive pomace oil, a substance extracted using industrial solvents from the solid waste matter from olive oil mills, and not from olives. (A spokesman for Gourmet Factory told the New York Times that he was unaware of the lawsuit, and would be looking into it.)

The NAOOA is a trade group that represents most of the large olive oil importers in the United States. Americans consume some 300,000 tons of olive oil a year, a quantity that’s growing rapidly, yet no federal or state agency does any systematic testing of olive oil. It’s hard to imagine such a situation in Italy, or in most of the Mediterranean, where numerous government agencies and investigative corps actively police the olive oil market. But that’s the reality in America; in fact, the NAOOA is one of the very few organizations to defend consumers and merchants against olive oil fraud. Since 1990, when it signed the International Olive Council’s quality monitoring agreement, the NAOOA has performed random sampling and testing of olive oils packed by members and non-members alike. In past years, when it has detected clear fraud, the NAOOA has often brought it to the attention of the FDA, state district attorneys and other public figures, and asked them to intervene against the companies committing the fraud. So far, the response from public figures has been negligible.

So this time, the NAOOA upped the ante. In August, 2012, it purchased of 9 tins of the Gourmet Factory’s Capatriti-brand “100% Pure Olive Oil” in stores in New York and New Jersey, and sent them to Professor Lanfranco Conte of the University of Udine, one of the world’s leading authorities on olive oil chemistry. Professor Conte performed tests on the product, which revealed levels of waxes, erythrodiol and uvaol content, and other chemical parameters that were far outside the legal levels for olive oil. Professor Conte concluded that “these samples of ‘100% Pure Olive Oil’ were, at best, some type of pomace, and, at worst, may also contain seed oils.”

The NAOOA then filed a lawsuit against Gourmet Factory, accusing it of harming both consumers and competing companies with its faux oil. The legal complaint is a model of force and clarity, and deserves to be quoted at length:

Gourmet Factory’s conduct is willful, deliberate, intentional, and in bad faith.

Gourmet Factory’s mislabeling constitutes unfair competition because it allows Gourmet Factory to obtain a premium price for inferior Capatriti-brand Pomace – misrepresented to be “100% Pure Olive Oil” – which can be manufactured at a fraction of the cost of authentic olive oil sold by members of the NAOOA and other legitimate producers of olive oils. The price differential between Pomace and authentic olive oil enables Gourmet Factory to unjustly enrich itself at the expense of consumers and legitimate business competitors [...].

Producers, distributors and retailers of olive oils then suffer from artificially deflated prices, the diversion of customers seeking legitimate olive oil, and the erosion of consumer confidence in the olive oil market, and in food labeling in general. The NAOOA is filing this action to stop Gourmet Factory’s harmful and destructive business practices.

The Gourmet Factory’s actions have caused harm and are likely to continue to cause harm to the public. Consumers purchasing something labeled “100% Pure Olive Oil” believe that they are purchasing a product that adheres not just to federal, state, and international guidelines, but that meets the basic, millennia-old understanding that “olive oil” means the unadulterated oil that comes from pressing olives – not from a chemical process that uses heat and solvents to extract oil from the residue of an olive’s pits and skin. Gourmet Factory’s mislabeling thus has a tendency to and actively does deceive consumers.

Because the difference between Pomace and authentic olive oil is not visible to the naked eye, consumers must necessarily rely on a label’s representations about the contents within. Accordingly, Gourmet Factory’s false and misleading representations are likely to and do deceive consumers – including potential purchasers of olive oil sold by members of NAOOA – into purchasing Gourmet Factory’s mislabeled oil instead of higher-priced, authentic olive oil, giving Gourmet Factory an unfair competitive advantage and harming consumers.

The complaint concludes by demanding that Gourmet Factory stop selling its misbranded product, and requesting that the company pay economic damages for the commercial harm done to NAOOA members.

Does all this sound familiar? Honest merchants being harmed by dubious dealers, consumers buying inferior products while thinking they’re buying something special . . . these are recurrent themes around the Mediterranean, in olive oil and in many other foods as well (witness the recent “horse meat lasagna” scandal that’s sweeping Europe). The fact that the US is beginning to wake up to these problems is encouraging news for all those who want good producers to prosper, and consumers to get the health and taste that they pay for.

by Tom Mueller
04 march 2013, World News > America