Spain’s Olive Oil Watchdog Reports More Violations
Spain’s olive oil inspectorate proposed 17 fines worth 52,100 euros last season, more than double the previous year’s tally, and found 30 plants with no traceability system at all. Its annual report also delivers a flat verdict on European storage aid: it did nothing for prices. Here is what the agency checked, what it found, and why this is probably its last report under that name.
What the agency did
The Agencia para el Aceite de Oliva, the state body that watches over the Spanish olive oil market, has published its report for the 2011/12 season. Its inspectors carried out 941 inspections and took 420 samples of olive oil from among Spain’s 1,744 active mills. They also visited more than 770 packing plants and went through stock movement records at 22 of the country’s 24 working refineries.
The agency’s job is less glamorous than fraud busting and arguably more useful. Spanish mills, packers and refiners must declare their stocks and movements every month, which is why Spain, alone among the big producers, knows in near real time how much oil is sitting in its tanks. The inspectors check that those declarations match reality.
| 2011/12 season | Figure |
|---|---|
| Inspections | 941, with 420 oil samples taken |
| Active mills in Spain | 1,744 |
| Fines proposed | 17, totaling 52,100 euros (7 and 11,200 euros the year before) |
| Plants with no traceability system | 30, against 21 the previous season |
| Running costs | 4.5 million euros, 83 staff |
What it found
The fines were not for adulteration. They went to plants that lacked the required stock movement records, stopped sending their monthly figures or sent inaccurate ones. Twelve of the seventeen were in Andalusia, including mills and what the agency calls virtual operators, traders who buy and sell oil without ever putting it in their own tanks. The rest were spread between Castilla y León, Catalonia and Extremadura.
More striking is the traceability count. Thirty production or packing plants had no system in place to trace their product at all, up from 21 a year earlier, and the agency passed those cases to the regional governments that license them. Andalusia accounted for ten, Aragon seven, Catalonia and Extremadura five each, Valencia three.
The verdict on storage aid
The most quotable line in the report concerns the European Union’s private storage aid, which pays to take oil off the market when prices collapse. Brussels opened three rounds during 2011 and 2012 and paid out more than 36 million euros. The agency’s assessment is that the measure had no effect whatsoever on prices, which only moved in the final quarter when the market realized the next harvest would be very small.
In his preface, agriculture minister Miguel Arias Cañete points to the other side of that season: a record Spanish crop of 1.6 million tons, strong sales, heavy exports and large carryover stocks. He also notes that this is likely the agency’s last report under its own name. Under Spain’s new food chain law, passed this month, it becomes the Food Information and Control Agency, taking its olive oil model to other sectors, beginning with dairy.
Fines of a few thousand euros are not a deterrent, and everyone in the trade knows it. The real pressure this agency applies is information: monthly stock declarations from every mill, packer and refinery mean nobody can quietly pretend that the tanks are emptier than they are. That is why Spanish price forecasts are worth more than anyone else’s, and why a bottler in a shortage year will tell you the market is tight while the published stock figure says otherwise.