Olive oil scam sounds familiar

A visit to Arizona saw your columnist learning about the intricacies of growing and processing olives into oil...

A visit to Arizona saw your columnist learning about the intricacies of growing and processing olives into oil, specifically at the Queen Creek Olive Mill just outside Phoenix. It’s more of a boutique agri-tourism operation, but it is integrated being it grows, processes and retails mostly its own olives. They appear to be quite successful, but any expansion could be hampered by expensive real estate that surrounds the operation. Their olive groves are of the oil variety; it turns out there are 700 varieties of edible and oil bearing types. The olive groves in Arizona are irrigated by highly subsidized water from government distribution canals. In the scheme of things, production in the US is small, and growers/processors have to be clever marketers to survive.

Most of the world’s olive oil comes from the Mediterranean area, with only small amounts grown in California, Texas and Arizona. The US supplies a mere 2 per cent of their own consumption and serves mainly the high-end premium extra-virgin grade market. American production is high cost and pales in comparison to massive low-cost growing/processing in Spain and Italy that involves hundreds of thousands of acres and millions of tons of olive oil. That’s why American olive oil can cost $25 per bottle compared to $6 for the European brands. But there are other reasons olive oil from the Mediterranean is cheap: the European Union at various times subsidizes production, industrial processes like chemical extraction are used, and wide-spread fraud is fairly common in the marketing of olive oil. The latter has proven beneficial to American processors/marketers as they are rarely implicated in the adulteration of olive oil.

The massive olive oil fraud involves the grading and labelling of the product, specifically “extra virgin olive oil”, the high-end premium grade. Numerous investigations by government agencies, consumer groups and universities have found that the virginity of the oil consumers are buying can be highly doubtful. Random tests have shown that as much as 70 per cent of imported olive oils labelled extra virgin is actually not of that grade. Studies also found that many so called olive oils were adulterated and diluted with other oils like sunflower and soybean oils. The centre of the oil fraud seems to be located in Italy and it’s nothing new. Ancient records show that olive oil fraud existed as far back as Roman times. Back then, there were Roman authorities who inspected the origin of olive oils and had a labelling system in place. Compared to what exists today, the Romans were more advanced in dealing with fraudulent olive oil. The problem today is that even though there are international standards as to what constitutes extra virgin, there is little testing or enforcement of the standards. The other problem is that taste-testing for better quality oils is difficult as most consumers can’t tell the difference between extra virgin and an average quality olive oil – even one that is mixed with other oils. Governments generally won’t get involved in formal testing and labelling because of cost and the fact that there is no food safety concern. All of that has given American olive oil producers and marketers a marketing opportunity as they go to great lengths to authenticate and guarantee their oils as being “extra virgin.”

The olive oil fraud reminds one of what goes on in the organic food business in North America. Like with the dubious labelling of extra virgin, the label “organic,” certified or otherwise, is no guarantee that the product is actually organic. That’s because of two realities shared with the premium olive oil business – testing of organic food products is sporadic at best (in fact its vigorsely opposed by the organic lobby business) and consumers in virtually all instances can’t tell the difference between organic food and regular food. As with the labelling of extra virgin olive oil, consumers put their blind faith with marketers and retailers and trust that if its labelled organic it must be organic. Most organic labelled food products are imported, but does anyone, except the deluded, actually believe organic products from China, Central America, Southeast Asia and elsewhere are guaranteed organic? If the authenticity of extra virgin oil can be so easily manipulated by producers/marketers in developed sophisticated western European countries, then fraudulent organic food labelling in corrupt less developed parts of the world should be just a regular matter of doing business. It would seem that without a robust testing protocol, it’s buyer beware – be it for olive oil or organic food products.