Opinion of the Economic and Social Committee on:the Commission Report to the Council and the European Parliament on the quality strategy for olive oil, andthe Proposal for a Council Regulation amending Regulations No 136/66/EEC and (EC) No 1638/98 as regards the extension of the period of validity of the aid scheme and the quality strategy for olive oil
Date: 2001-05-30
Institutions: European Economic and Social Committee
Subjects: agricultural production, aid system, consumer information, export, olive oil, product quality

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Opinion of the Economic and Social Committee on:

— the ‘Commission Report to the Council and the European Parliament on the quality strategy

for olive oil’, and

— the ‘Proposal for a Council Regulation amending Regulations No. 136/66/EEC and (EC)
No 1638/98 as regards the extension of the period of validity of the aid scheme and the
quality strategy for olive oil’

(2001/C 221/10)

On 19 January 2001 the Council decided to consult the Economic and Social Committee, under Article
37 of the Treaty establishing the European Community, on the above-mentioned report and proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 10 May 2001. The rapporteur
was Mr Barato Triguero.

At its 382nd plenary session (meeting of 30 May 2001), the Economic and Social Committee adopted
the following opinion by 110 votes to one with five abstentions.

1.

Introduction

The Economic and Social Committee has drawn up an
1.1.
opinion on the Commission’s proposal on the extension of
the aid scheme and the quality strategy for olive oil. It also
makes appropriate comment on the report on the quality
strategy for olive oil, given its influence on the future CMO
(common market organisation) arrangements for olive oil.

The ESC also wishes to highlight the social importance,
1.2.
both historically and in the present, of olive production, which
is part of the culture of many regions of the Union.

1.3.
The primary objective of any CMO is indisputably to
preserve production and the social fabric it supports. Olives
have been and remain a basic element in the economic
and social life of the producer regions. Their location and
concentration in some of the Union’s most depressed regions,
their vital employment role in many regions (accounting for
90 % of farm employment in some), the high number of farms
depending on the crop, the associated processing industry etc.
place olives at the heart of the economic and social life of such
areas (1).

The ESC would point out that olive production rep-
1.4.
resents a stable source of employment, supported by the
current CMO. Countless olive-producing farms provide
income both for workers and small producers in areas with no
alternative employment. Any modification of the current CMO
which failed to take account of this fact could have a negative
impact on employment, with an ensuing loss of population
and territorial imbalance (1).

1.5.
Olive groves represent a crop of major ecological and
environmental value. They often serve to protect against soil
erosion and provide nesting areas and food for birds and
hoofed animals.

1.6.
The ESC would argue that as the southernmost pro-
ductive wooded areas in the EU, olive groves play a key social
and environmental role in areas where they could not, or
could not easily, be replaced with other crops, and help rural
populations to continue living in the countryside.

1.7.
The EU leads in olive oil production, with 74 % of the
world total. As such, it underpins the work and income of
many farms.

1.8.
The ESC would stress the nutritional and health
importance of olive oil in preventing disease, and not only of
the cardiac and cardiovascular type; consumption should be
encouraged worldwide in view of the innumerable benefits it
provides.

1.9.
Regarding quality, the Commission must propose clear
rules to the Council to guarantee olive oil authenticity, by
improving consumer information with a labelling system
which prevents confusion (1).

1.10.
to the Commission:

The ESC wishes to indicate its interest in the following

— certification and safeguarding of olive oil quality;

— enhancing the quality and reducing the environmental

impact of production;

(1) CES 600/97 — OJ C 287, 22.9.1997.

— improving sector and market management.

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2.

The proposal

2.1. General comments on the proposal

2.1.1.
The ESC considers that the Commission’s proposal
to extend the current support system for the sector for a
further two marketing years, while gathering more detailed
information on the state of olive-growing, is the best decision
at present. Given the current lack of data indicated by the
Commission, it would be inappropriate to carry out any other
kind of reform until there is greater knowledge of the sector.
Many of the factors requiring a transitional CMO in 1998
remain unresolved.

2.1.2.
The ESC believes, however, that this two-year period
should be used to improve a number of aspects and adjust the
present regulation of
the European olive oil market, by
immediately acknowledging present conditions. The Com-
mission should also urge the Member States to complete their
work on the Geographical Information Systems (GIS) and
other systems which enhance monitoring.

2.1.3.
This period should also be used to implement more
flexible machinery, to ensure that the market is not affected by
lengthy price slumps: producers have been left vulnerable to
market turbulence since public aid was abolished under the
1998 reform, which basically affects family-run farms and less
productive areas.

2.1.4.
The aid scheme for table olive producers has helped
to stabilise markets, make them more transparent, improve
verification and boost employment. All
the producing
countries have progressively adhered to the voluntary option
of directing aid to the table olive sector: this option should
therefore be retained in the CMO to come into force from
1 November 2001.

The ESC warmly welcomes

2.1.5.
the Commission’s
decision to give close consideration to the quality strategy for
olive oil in the EU, believing that this should represent the
main objective of CMO reform over the coming years. The
ESC shares the Commission’s concern to boost transparency,
crack down on fraud and provide consumers with more
information to help them choose which oil to buy.

2.1.6.
In this regard, the proposals to rationalise the number
level, appear sound,
of designations, particularly at retail
provided that they are backed up with the necessary efforts for
consumers to be fully informed of the choices the market
provides and the real differences between such choices. Action
of this kind could increase general knowledge of the properties
of the different types of olive oil among both existing and
potential consumers.

2.1.7.
Since the present CMO restricts eligibility for aid to
olive groves planted before 1998, the ESC proposes that in
order to prevent the amount of aid being affected, the control
methods be broadened. This would guarantee that aid is
channelled only to olives and oil from eligible groves.

2.1.8. Without prejudice to the above comments, in view
of the length of the Commission report, the ESC has analysed
the main aspects of the document in greater detail.

3.

The report

3.1. Comments on the report

3.1.1. C o m m e n t s o n t h e i n t r o d u c t i o n

3.1.1.1.
From the outset of its analysis of the situation in
the sector in the EU, the Commission voices its preference for
giving priority to aspects bearing on quality strategy before
launching upon a proposal for definitive reform. Control and
organisation of the sector also feature prominently in this part
of the document. Dislocations are detected in the formation of
prices for olive oil which are not in line with the quality
expected by consumers, with considerable overlap between
categories.

The Commission is aware that some decisions,
3.1.1.2.
such as those regarding oil designations, may be challenged by
certain subsectors of the industry, but has decided to press
ahead with its proposal because aspects such as labelling which
accurately reflects package contents, and the development of
analysis techniques for better identification of olive character-
istics, justify this type of initiative on quality strategy for olive
oil and table olives.

3.1.2. A n a l y s i s o f t h e p r e s e n t s i t u a t i o n ( s e c -

t i o n 1 )

3.1.2.1. Rules and standards (1.1)

3.1.2.1.1.
The ESC endorses the aim of carrying forward
the application and development of existing standards on olive
oil, such as Directive 2000/13/EC on labelling, and on the
guarantee of product authenticity. However, it believes that
the Commission will fail to achieve its aim in full unless this is
accompanied by a blanket prohibition across the EU on

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offering consumers lawful blends of olive oil with other
vegetable oils. The ESC is aware of the legal difficulties which
could arise from a blanket prohibition throughout the EU on
blending olive oil with other vegetable oils, but feels that the
positive effects in terms of market transparency might justify
the work involved. Given the health-promoting nature of the
product, the ESC urges that efforts be made to make olive oil
more accessible to lower-income consumers.

concentration under way in the sector. In the ESC’s view, a
number of functions must necessarily be performed by the
appropriate authorities, such as monitoring of aid and its
recipients.

3.1.2.2.3. Categories of olive oil produced and sold (1.2.2)

The ESC believes that under present circum-
3.1.2.1.2.
stances, in which consumers are insufficiently familiar with the
oils available on the market, using acidity as the classification
parameter could, in some cases, confuse consumers and lead
them to make wrong judgements. For this reason, it considers
that the packaging of currently designated ‘olive oils’ should
not indicate their degree of acidity, since they are obtained
from a blend of refined and virgin oil. This would prevent
acidity being perceived in inverse proportion to quality by
consumers. Natural acidity is in fact one of the final quality
parameters for virgin oils.

3.1.2.1.3.
Over recent years, the production sector has
accomplished major efforts to adjust its equipment to the
more modern extraction processes which have enhanced the
quality of the oil obtained and minimised the environmental
impact of mill operations. In the light of this, the ESC would
urge the Commission to allocate the bulk of the 1.4 % currently
withheld from production aid to promoting olive oil, under
the sector’s supervision. This comment should not be taken to
imply giving up the use of phytosanitary treatments in areas
of endemic infection, as this is necessary to maintain product
quality, but should be effectively supervised by specialist
personnel and carried out only when necessary.

3.1.2.2. Market situation (1.2)

The ESC agrees with the Commission that
3.1.2.2.3.1.
technical developments have brought about a considerable
reduction in the production of lampante categories. Bearing in
mind that olive harvesting is influenced by weather and
climate, significant percentages of defective or lampante oils
cannot be completely avoided.

3.1.2.3. Quality factors (1.3)

The proposal to draw up a Community-wide
3.1.2.3.1.
code of good olive cultivation practice covering both olive
groves and mills could provide an incentive to promote oils
produced in accordance with the code, as this would be
indicated on labels. In any case, the code should be drafted in
full agreement with the relevant subsectors, to ensure that it
can be put in practice.

3.1.2.3.2.
Emphasis must continue to be placed on replac-
ing conventional pressing systems, which produce an effluent
which is highly polluting for water and require prior decan-
tation which also has an environmental impact, with modern
centrifuging extraction systems, under which the rich residue
can be further exploited to obtain olive-pomace oil.

3.1.2.2.1.
The ESC believes that analysis of the market
situation should extend beyond the sector’s operators and olive
oil categories. The opportunity presented by the forthcoming
reform of the CMO should be taken to correct or address
points such as obvious market distortions or the ineffectiveness
of the present private storage system.

3.1.2.3.3.
Oils obtained by exhausting pulp by physical
means away from the mills in which oil is extracted from the
olives as harvested is of lower quality. On account of the
length of time since initial extraction, certain values can
often significantly exceed those considered normal for quality
parameters. These oils could therefore be placed in a lower
category, as for example the Commission suggests for olive-
pomace oils.

3.1.2.2.2. Operators and their organisations (1.2.1)

3.1.2.2.2.1.
The high number of producers in the EU
warrants efforts to encourage them to join together. Consoli-
dation can boost the functions of these producer organisations
and foster a more organised structure for production from the
industrial
bottom up,

thereby mirroring the process of

Olive paste, once processed in mills, retains a
3.1.2.3.4.
percentage of oil which can be extracted by chemical or
physical processes. With a view to improving control of the
quantities produced and the aid granted,
it would seem
appropriate to propose at this stage that the current flat-rate
aid for olive-pomace oil production be replaced with a new
procedure reflecting the quantities actually produced.

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3.1.2.3.5.
The ESC shares the Commission’s view that all
oils derived from pomace should be described as crude olive-
pomace oil, and regrets that the opportunity has been missed
to introduce payment of the aid for olive-pomace oil on the
basis of the actual quantity produced. This would also help to
ensure more effective supervision of the quantities of olive oil
produced.

Regarding the possible uses of pomace,

3.1.2.3.6.
in
addition to obtaining pomace-olive oils, thought should be
given to using the substance as an organic fertiliser (after
composting), particularly in areas of predominantly chalky or
high pH soils. This would reduce the use of synthetic chemical
fertilisers and the energy costs involved in producing them
would be saved. The costs of transporting a pulp such as
pomace, which has a high water content, would also be saved.

3.1.2.3.7. Oils sold for consumption (1.3.3)

3.1.2.3.7.1.
Aware of the low level of consumer knowledge
concerning the quality and types of olive oil, the Commission
proposes to clarify and reduce the number of current desig-
nations at both the wholesale and retail
levels. The ESC
welcomes the Commission’s stance, and it is to be hoped that
its proposals will be sufficiently understood by consumers, for
whom the suggested changes are basically intended.

3.1.2.3.7.4.
A temporary compromise solution might be to
retain the ‘olive oil’ category until the study is completed, but
for labels to include the expression ‘refined and virgin olive oil’
in clear lettering, 2/3 of the size of that used for the ‘olive oil’
designation. This would give consumers an extra element of
choice in comparing olive oil prices and qualities. The
compromise could be accompanied by further research into
analytical methods to enable the proportions present in blends
in each batch to be identified, or at least using tracers combined
with random checks.

3.1.2.3.7.5.
The ESC agrees with the Commission on the
need to stamp out practices such as deodorising lampante oils
for subsequent direct consumption: they constitute economic
fraud for consumers and unfair competition for other pro-
ducers and packagers.

3.1.2.3.7.6.
The sector’s image is tarnished by the cases
which have been revealed of blends of seed oil with olive oil,
fraudulently sold as ‘olive oils’. If unscrupulous operators are
not to be tempted, it is essential for this latest, quality-oriented
reform to impose a blanket prohibition across the EU on the
production and sale of blends of vegetable oils with olive oil.
In any case, a tightening-up of the labelling rules is necessary.

3.1.3. S u g g e s t e d a p p r o a c h e s ( s e c t i o n 2 )

There is a clear lack of analytical procedures
3.1.2.3.7.2.
for identifying specific lawful blends of olive oil and determin-
ing the proportions involved. The most sensitive point of the
Commission proposal under this heading is the present use of
the term ‘olive oil’, which is at the same time a generic
designation and a specific category.

3.1.3.1. Classification of olive oil (2.1)

3.1.2.3.7.3.
This overlap introduces an element of con-
fusion which should be removed. This could be achieved by
selecting a new term for the present ‘olive oil’ category (blend
of refined and virgin oils), adding some qualification — with
neither a negative or a positive connotation — which clearly
distinguishes it from the generic term olive oil. Given the
possible economic repercussions for some of the subsectors
involved, the ESC proposes a prior survey of consumers and
users to sound out their reaction to a possible change in the
current designation of olive oil. In any case, efforts must
continue to raise the profile of higher-quality oils and allow
base prices for the different categories of olive oil to be more
clearly differentiated. In so doing, it must be borne in mind
that because of their unique production process, higher-quality
oils generate more employment, require shorter processing
times and are more environment-friendly.

3.1.3.1.1.
The Commission’s proposed amendment to the
Annex to Regulation No. 136/66 on the designation and
definition of olive oils introduces a new term in the wholesale
trade (crude olive oil) to designate all virgin oils, and abolishes
the ordinary category. The ESC considers the amendment to
be acceptable since the quality parameters, such as acidity,
which must be met for a given designation are stricter.

3.1.3.1.2.
The current ‘olive oil’ category, which the Com-
mission proposes to describe as ‘standard’, also covers blends
of refined and virgin oil. Since the refining process enables the
degree of acidity to be verified in the refined oil element,
acidity should be regarded exclusively as an upper limit (1°)
which may not be exceeded. At consumer level, however, and
in order to avoid confusion, acidity should not be considered
as a sign of quality: in the ESC’s view, therefore, this parameter
should not appear on labelling.

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3.1.3.1.3.
The ESC welcomes the Commission’s proposal
to impose a maximum limit of 5 litres on packages for the
retail trade, in order to step up safeguards regarding the quality
of oil consumed by consumers.

method of analysis. The Community therefore needs to adopt
the new IOOC (International Olive Oil Council) method while
research designed to improve it continues.

Directive 2000/13/CE further develops and
3.1.3.1.4.
updates labelling rules for foodstuffs. Moves to standardise
label contents will be helpful, provided they do not involve
repetition, and particularly on condition that any claim made
on a label can be proved by the company responsible for the
packaging. If left unregulated, the proliferation of descriptions
and claims on labels could confuse consumers. The ESC
therefore recommends that information included on labels or
back labels be brought into line with existing law, and in any
case that optional indications can be checked by the official
supervisory bodies in each Member State. In this regard, certain
marketing approaches which push the truth to the limit should
be reigned in.

3.1.3.1.5.
The optional designation of origin in the virgin
and extra virgin olive oil categories is worth mentioning.
Indication of origin would boost clarity and transparency.

The Commission’s proposals on restricting the
3.1.3.1.6.
option of
indicating regional origin of virgin olive oils
produced in the EU exclusively to Protected Denomination of
Origin (PDO) and Protected Geographic Indication (PDI) are
inadequate. The possibility of indicating origin, defined as the
place of origin of the olives, should be extended to all virgin
olive oils.

3.1.3.1.7.
This possibility would ensure that the origin of
olive oils from each region or Member State would have to be
determined regardless of where the product was eventually
packaged. This approach would also distinguish EU-produced
olive oils from imports from third countries.

3.1.3.2. Analytical checks (2.3)

3.1.3.2.3.
Oils to be submitted for analysis should include
all those marketed within the EU, in order to avoid practices
such as bulk selling which still continue in certain producer
countries for final consumption. This represents a worrying
proportion of total production. The practice should be stamped
out in order to provide consumers with a guaranteed product.

3.1.3.3. Operators’ organisation and activities (2.4)

The most efficient approach would appear to be
3.1.3.3.1.
to organise the olive oil production sector by strengthening
and extending the role of existing producer bodies in the
sector, in order to harness the level of integration producers
have achieved.

3.1.3.3.2.
Extending the scope of these bodies’ involvement
would be one way of optimising existing organisational
resources. This may not however be universally applicable,
and in the ESC’s view aspects such as preventing fraudulent
labelling must be the exclusive responsibility of the appropriate
authorities.

Sector and market management might be one of
3.1.3.3.3.
the new functions for the sector’s producer organisations most
worthwhile pursuing. The way they are spread across the
various production areas means they have direct access to
highly reliable information. Duly processed, this information
can play a key role in enhancing market trend forecasting,
sales decisions, transition from one marketing year to another
etc., thereby optimising use of resources and avoiding major
price fluctuations on the olive oil markets.

3.1.3.2.1.
The ESC shares the Commission’s opinion on the
need to improve the accuracy of the analyses carried out on
olive oil in order to prevent or detect improper blends.

3.1.3.3.4.
Environmental management of the products and
subproducts of the olive oil cycle, including action such as the
phytosanitary treatments needed to maintain quality, is anoth-
er area to which the functions of producer organisations might
be extended.

3.1.3.2.2.
Panel testing remains a valid method for qualify-
ing olive oils, despite its high cost per unit sampled. However,
the significant element of subjectivity and randomness in the
current analysis should offer sufficient reason for more
intensive efforts to devise an alternative, more reproducible,

3.1.3.3.5.
In any case, there must be the greatest possible
degree of cooperation between producer organisations and
the appropriate authorities, as well as between Community,
national, regional and local authorities, with a view to ensuring
that measures taken comply with the relevant legislation.

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3.2. Comments on the operational conclusions of the report

for a CMO which helps maintain production as a means of
achieving appropriate development of the rural environment.

Following a one-year transitional period, labelling
3.2.1.
will have to comply with the specifications arising from the
CMO applicable with effect from 1 November 2001. This
should also be the deadline for making it mandatory to retail
olive oil in packages of not more than 5 litres fitted with a
non-reusable seal, designed to make refilling impossible.

3.2.2.
The ESC is pleased that the Commission acknowl-
edges the enormous promotional and research work being
carried out by the IOOC, but regrets that this is not reflected
more widely in areas such as promotion in the internal market,
and that its research budget has not been increased.

The ESC proposes that, in the light of the IOOC’s
3.2.3.
international experience with olive oil and given the huge
importance which a change of designation can have for the
external and internal promotion of olive oil, the body’s views
should be heard before making any such changes.

4.2.
The ESC supports the Commission’s plan to extend the
current CMO for a further two marketing years, since systems
providing a complete picture of the sector have not yet been
completed. However, certain instruments such as private
storage, which have been revealed as ineffective in periods of
low market prices, must be corrected.

4.3.
The ESC welcomes the Commission’s aim for con-
sumers to be better informed on the olive oils offered on
the market, and the opportunity to amend a number of
designations, as part of a quality strategy for olive oil. A start
should be made on these approaches in the near future: there
is no need to wait a further two marketing years to implement
them.

4.4.
The ESC advocates stepping up research in the sector
with a view to obtaining higher quality oils and boosting
exports.

4.

Final comments

The ESC wishes to draw attention to the importance of
4.1.
the olive oil sector in the EU and, consequently, to the need

It is essential,

4.5.
in the ESC’s view, to continue and
intensify the EU’s promotion policy for this sector, in terms of
both market regulation and increasing olive oil exports.

Brussels, 30 May 2001.

The President

of the Economic and Social Committee

Göke FRERICHS