20 Sep

Olive Oil Sector Could Be Shaken Up By New Labelling Rules

The European olive oil market could be set for a shake up if new labelling rules proposed by EU officials come into force. The rules would make origin labelling compulsory for virgin and extra virgin label olive oil, and could come into force as early as July 2009.

The move could provide a boost for premium olive oil producers, but could have a substantial impact on some of the biggest mass-market olive oil brands. They generally blend oils from several different countries and could therefore be perceived to be of inferior quality.

The rules propose that oil produced from olives from just one EU country would be labelled with the name of the origin country. Oil produced from olives from more than one EU country would be labelled with ‘blend of community olive oils’, while oil produced using olives from outside the EU would be labelled with ‘blend of non-community olive oils’ or ‘blend of community and non-community olive oils’.

Although on the surface this is a relatively minor piece of legislation, it could significantly dent the brand image of some leading olive oils. Major brands such as Bertolli, owned by Spain-based SOS Cuétara, and privately owned Filippo Berio proudly claim to be bottled in Italy and their Italian origins are a key piece of both brand’s appeal. However, both products are made from a blend of olive oils, some of which do not come from Italy; if this fact is clearly emblazoned across the front of the label then the image of mass-market brands could take a significant dent.

However, while the new rules could damage the image of major brands, there would also be some beneficiaries. Olive growers in Italy, who are already unable to produce enough olives to meet demand for authentic Italian olive oil, are likely to see the prices of Italian olives increase as more consumers are made aware of the origins of their olive oil.

Producers of premium olive oil made from olives from just one country are also likely to benefit as consumers across the EU become more discerning about the origins of their olive oil. Major producers could perhaps respond by introducing more premium lines, made from 100% Italian or 100% Spanish olives. However, with the business models of both Bertolli and Fillipo Berio built around selling consistent mass-market products, this could prove to be a major strategic headache.

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