ACCC crackdown puts heat on olive oil claims

Posted by Isobel Drake on 5th October 2009

An Australian Competition and Consumer Commission investigation has discovered that some distributors may have misled consumers with assertions that their product was extra virgin olive oil. As such, three companies have agreed to carry out more testing to ensure they do not fall foul of the Trade Practices Act.

“Certain importers, distributors and retailers will now conduct more testing to verify that the extra virgin olive oil they supply is as claimed,” ACCC Chairman, Graeme Samuel, said today. “Consumers can pay a premium for this type of oil, which is often touted as being fresher, healthier and tastier than other cooking oils – and they should get what they pay for.”

Although there is no mandatory standard for extra virgin olive oil, it is widely accepted that it is the highest grade oil obtained from the first press of the best quality olives, is not blended with other oil and there are no solvents or refining in the process.

After receiving information that a number of products sold in Australia as extra virgin olive oil may have been refined, adulterated with other oils (such as canola or rapeseed oil), or of poor quality, the ACCC conducted its own investigation.

Tests were commissioned on a selection of imported and locally produced oils labelled extra virgin olive oil against the International Olive Council’s trade standard for olive oil*. The results indicated that three samples were not extra virgin olive oil, as defined by the IOC:

* IGA Distribution Pty Ltd’s corporate brand Isabella Extra Virgin Olive Oil which was sold at IGA-branded supermarkets throughout Australia
* Paese Mio Organic Extra Virgin Olive Oil, imported by Calcorp and supplied exclusively through Coles supermarkets, and
* Aigeon 100% Extra Virgin Olive Oil, imported by Basfoods and supplied mostly to continental delicatessens and restaurants.

The ACCC believes that, by representing that these products were extra virgin olive oil, IGA Distribution, Calcorp and Basfoods are likely to have engaged in false, misleading and deceptive conduct in breach of the Trade Practices Act 1974.

As part of the court enforceable undertakings accepted by the ACCC, Calcorp and Basfoods have pledged that, for the next three years, they will obtain a certificate of analysis from their suppliers demonstrating the product’s compliance with the IOC standard, which they will then verify with independent testing, before supplying a batch of oil labelled olive oil, virgin olive oil or extra virgin olive oil.

For the next three years, IGA Distribution will require each of its suppliers of corporate brand extra virgin olive oil to provide an annual test report that demonstrates compliance of the extra virgin olive oil with specified criteria.

“A representation that a product is extra virgin olive oil is what I would call a ‘credence claim’ – consumers can’t tell whether oil is extra virgin just by looking at, or tasting, it so they have to rely on the credibility of the supplier to provide truthful and accurate information,” Mr Samuel said. “The same applies for businesses that import or retail oil. Importers, distributors and retailers must be vigilant in verifying that their product is extra virgin olive oil as claimed so there is no scope for rogue producers to supply adulterated or sub-standard oils as extra virgin olive oil.”

“On this occasion the ACCC has scrutinised importers and distributors in particular in an effort to thwart the supply of falsely labelled oils to retailers and onto customers. However each company in the supply chain can be held to account for false, misleading and deceptive conduct so I suggest all Australian suppliers of extra virgin olive oil have in place adequate processes so they can be certain that the claims they make about products they sell are accurate and truthful.”

The ACCC has also engaged major retailer Coles in discussions, encouraging the implementation of measures to ensure the extra virgin olive oil being sold Australia wide by Coles is accurately labelled.

In future, Coles intends to require test reports from its suppliers of proprietary brands of extra virgin olive oil annually and will verify that the test reports support the claim that the product is extra virgin olive oil.

* The IOC standard defines extra virgin olive oil and sets criteria for purity and quality. While the standard is not mandatory, it is a useful and recognised guide for establishing the essential elements of genuine extra virgin olive oil.