Fats & oils
Choppy macroeconomic waters Against this backdrop, the industry has had to navigate some choppy macroeconomic waters of late. At least for OGGLIO’s Traponi, the elephant in the room continues to be Brexit. “We only sell our extra virgin olive oil in the UK, and since Brexit the cost of shipping from Sicily – where it is produced – has gone up, not to speak of import duties that didn’t exist before,” he explains.
Virgin? Extra virgin? Cold pressed? Single source? The new rules aim to make the intricacies of olive oil easier to understand.
As a result of this, Trapani doubts many smaller producers will be happy, given – by his reckoning – that the regulations seem to have been the result of a lobbying exercise on behalf of the major producers. “Sure, the region of origin is not necessarily a seal of quality, unlike the cultivar – or cultivars, if a blend – that you’ll find in your bottle. However, it is not yet mandatory to add this very prominent information,” he notes. “Imagine buying a bottle of wine labelled just ‘Italian red’, not Lambrusco or Nero d’Avola, as if the two are the same.” However, Yacine Amor seems to disagree. The managing director of the Artisan Olive Oil Company describes the EU Framework as an “important step” in the promotion of quality standards across the sector, as well as improving communication with the consumer. But he stresses that further steps need to be taken, noting that in practice when it comes to harvest year, “consumers could be purchasing olive oils which have been mixed from different harvests without knowing it. A similar approach has been used for the origin of the oil. Amor goes on to explain that while the producer can choose to refer to single origin olive oils as such, consumers may want a clear message of origin on the bottle. “Within the extra virgin olive oil category, there can be very significant quality differences which relate to totally different approaches to the production of extra virgin olive oil and result in a large variety of price points,” he continues.
186
Italy’s Department of Central Inspectorate
64
The number of fraudulent olive oil crimes reported to Italy’s ICQRF in 2021.
Amor argues that the consumer could gain in understanding perhaps two levels of quality within extra virgin olive oil, which could easily be determined through tougher thresholds with regard to the chemical and organoleptic analysis.
“For example, an extra virgin olive oil bottle of 500ml can cost [from] £3.90 to £40. Besides the packaging costs, there can be very significant differences in quality which are very difficult to communicate within the range of the current regulatory framework.”
From a practical standpoint, there is now more paperwork to deal with and where it used to take one week to send a pallet, it may now take to up to one month. It’s a tale likely to be repeated to varying degrees in other non-EU markets. In the meantime, further scarcity of sunflower oil from Ukraine hasn’t helped small producers of high-quality extra virgin olive such as OGGLIO. Conversely, the likely winners from this scenario will be the major producers of low- quality olive oil (rarely extra virgin) that sell cheaply through supermarkets. “On a positive note,” Trapani adds, “thanks to our direct-to-consumer approach, we’ve built, through transparency and quality, a decent number of loyal supporters, who’ve helped us navigate the turbulent waters of the pandemic years pretty much unscathed.” Looking ahead, Trapani says consumers need to be helped to become savvier through education. “It’s important to define and market a high-quality product as such: many people see extra virgin olive oil as a commodity product, when in fact it’s quite difficult, and costly, to produce to very high standards. It requires skills, passion and a lot of attention. Just like with wine 30 years ago, customers need to become savvier and learn how to read a bottle of ‘proper’ extra virgin olive oil.” While Trapani views market impacts through a Brexit prism, Amor takes a shorter-term view. As he puts it: “The market for olive oil is currently impacted by three main factors: 1. A difficult harvest across the Mediterranean that has lead to lower production and higher bulk olive oil prices.
2. A record high inflation regime affecting particular logistics and packaging costs.
3. Changing consumer behaviour in light of dramatic increase in utility bills and mortgage costs.”
Though it is hoped that negative macroeconomic factors are likely to be less severe over the next couple of years, the additional paperwork for non-EU producers – typified by Brexit, for example – may eventually impact both the EU internal market and its export capabilities. In the wider sphere, the jury is still out, given the new regulations are only now bedding down. ●
Ingredients Insight /
www.ingredients-insight.com
LightField Studios/
Shutterstock.com
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