The US Trade Commission recently recently released a report: Olive Oil: Conditions of Competition between U.S. and Major Foreign Supplier Industries. The report took a year to research and produce and it delves in detail into the olive oil industries of the major producer countries such as Italy, Spain, Greece, etc.
While the report is focused on the United States, it does have some information which is relevant to South Africa due to the fact that both countries are relatively new and small producers on the global scene. The difficulties that the US faces, will be similar to the difficulties that SA faces.
For instance, if one read this quote from the report abstract, one could easily substitute SA for US:
The benchmark for international standards for determining the grade of an olive oil are set by the International Olive Council. Our findings suggest that the current standards for extra virgin olive oil are widely unenforced and allow a wide range of olive oil qualities to be marketed as extra virgin. Broad and unenforced standards can lead to adulterated and mislabeled product, weakening the competitiveness of high-quality U.S.-produced olive oil in the U.S. market. In addition, many U.S. consumers are unable to distinguish quality differences and, as a result, gravitate toward less costly oils, giving an advantage to large bottlers that sell low-cost imported product.
We face exactly the same difficulties here. It will be interesting to see how the US responds to this report. South Africa might benefit by considering emulating the actions taken by the US. More defined grading standards at an international level would benefit all countries.
Other interesting points in the report include:
- EU government support programs contribute to higher overall supplies of olive oil, reducing global olive oil prices.
- U.S. retail consumers are generally unfamiliar with the range of olive oil grades, although they tend to favor extra virgin olive oil.
- Global olive oil prices are driven by Spanish production.
- Italy plays a key role in the global olive oil supply chain as trader, blender, and bottler.
- North Africa is the largest olive oil-producing region outside the EU.
The report makes for dry reading but is packed with interesting information about the global olive oil industry.