Brussels, 30 November, Draft Report of the 18 th of November Advisory Group on Olives and Derived Products

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1 Brussels, 30 November, 2010 Draft Report of the 18 th of November Advisory Group on Olives and Derived Products 1. Approval of the minutes and agenda of the last meeting of 8 th of June The minutes have been approved. The elections planned for the day of the meeting have been postponed, due to the absence of Mr. Forcella. Two applications have been received by the Commission. Exceptionally, Mr. Vostanis ensured the Presidency of the meeting. 2. Market situation From the 1 st of July 2010 the references used for Italian lampant olive oil is Lecce and Bari for extra virgin olive oil. Prices are above the private storage levels. Chair asked whether data on lampant olive oil prices correspond to different acidity levels from one country to another. The Commission promised to examine the matter and revert. Olive oil imports from 1 st of July to August 31 st amounted to tons. The EU exported during the same period tons. Italian and Spanish exports for 2009/2010 represent around 44% each of the total exported. The production for 2010/2011 is estimated at tons. Spain exported to other EU countries in 2009/2010 significant quantities, representing about 64% of the total intra-community trade. Copa-Cogeca asked clarification on the community sales figures and confirmed that the figures for Portugal will be sent soon. The Commission clarified that figures are taken from Eurostat. A representative of trade inquired on the comparability of EU and International Olive Council (IOC) data. A representative of the environmentalists said that they report is being drafted on the social and environmental structure of olive groves and asked the Commission for statistics. Additionally, a change in the composition of the Advisory Group was requested by the envrionmentalists in order to have more representatives of the environment and social issues which could raise corresponding issues. Chair clarified that the future of the CAP should have been discussed but on account of the overlap with the issuing of the Communication, the presentation would be postponed. Chair asked for the adjusting of the figure of acidity from 0,8 to 0,5 in the Commission statistics for extra virgin olive oil in Greece and asked for clarification on the Copa-Cogeca statistics. The producers estimates include figures from IOC and national administrations and should be more consistent with the Commission forecasts. Copa-Cogeca clarified that a change is ongoing in the structure of production. The representative of the environmentalists asked for statistics on these changes. The Commission argued that figures have to be presented per marketing year which doesn t coincide with the IOC reference year. The distinction between bulk and small packages can no longer be made on account of the management of this instrument by DG Taxud. The Commission will verify the Greek prices which Chair had raised as not being representative. A representative of farmers asked about the price level and drew attention on the last two years trend during which products have been sold below cost level, trend which is expected to continue in the next marketing year. The Commission underlined that private storage cannot be activated on account of the price level. The farmers argued that the price level is essential for the existence of the farmer who not only creates a marketable product, but also plays a vital role in protecting the environment.

2 2 3. Olive oil exporting problems to Australia and the US The Commission made a presentation on the above mentioned issue. Australia should have published on the 4 th of November the draft standards for olive oil, but this date has been pushed to the end of the year. The last stage of elaboration of the standards is unknown but the previous draft showed certain discrepancies with the Codex Alimentarius. The Commission is following closely the evolution of this work. One explanation to this situation would be that Australian olive oil production increased since 2000 and possibly faces pressure from the international markets. As of October 25 th the US applies on a voluntary basis new standards for grades of olive oil. These standards also present some deviations from Codex Alimentarius. The UC Davis 0live Center also issued a report, based on analysis of 52 samples of olive oil, concluding that there is significant deviation from what is labelled and the actual product. The methodology of sampling and some methods used are not reliable neither internationally recognized. A second report should follow but no information is yet available. The Commission s stand is that the methods should be analysed in the IOC chemist group. The item is on the agenda of the incoming IOC meeting end November. A representative of farmers underlined the danger of such a situation for EU olive oil producers and called upon packers to protect EU production. A representative of the industry asked for the international body to represent all countries in the world and for the Commission to help the IOC get its authority back. The front on attacks from the US and Australia linked to EU prices should be counteracted and the EU should contribute to helping the IOC. A representative of trade underlined that although the statistics of the study are weak they do cast doubt on the quality of EU oil. Proper scientific backing to show the quality of the products has to be found in order to avoid consequences. The Commission underlined that in the new producing countries some analysis parameters are different from the EU. The IOC started a survey on the composition of olive oil but assurances on the anomalous parameters cannot be given. The Commission is also supporting an increased role of the IOC at an international level and are active in achieving standardisation for olive oil. 4. Status of negotiations with the Euromed and Mercosur countries With Mercosur, the EU already had two negotiations sessions which focused on the regulatory side. In the next two weeks another round will take place, followed by an exchange of offers in January. Further rounds are scheduled for March, May and July Olive oil is an offensive interest in these negotiations, which also focus on the protection of geographical indications (GI). A representative of farmers asked more information about the GI short list. A representative of the industry asked whether olive oil tariffs are aimed at being dropped with Argentina. The Commission clarified that the short list refers to GIs and includes olive oils and olives. The Commission aims at seeing olive oil tariffs dropped but these results cannot be guaranteed at this time. A representative of the industry asked whether concessions for Central American and Andean countries have been established and on the date of entry into force of these agreements. The Commission stated that the above named agreements are undergoing ratification and the information is yet not public. Their date of entry into force is not known either. With Euromed, the agreement with Morocco has been signed in December 2009 by negotiators and is now under discussion in the Council. The text of the agreement is public and provides for access on the Moroccan market of 1500 tons for EU extra virgin

3 3 olive oil and 500 tons for EU virgin olive oil, both at zero duty (additional to the current quotas: concerning Moroccan quota in EU market (in the current agreement provided 3920 tons at zero duty for olive oil, CN Code 1509 and 1510). The new agreement will liberalize imports of olive in the EU market. This agreement should be signed by the Council mid-december and should go through the European Parliament for consent. The entry into force takes place on the 1 st day of the third month following the decision, which should arrive at the end of the summer/beginning of autumn With Tunisia a fifth negotiating session is scheduled for next week. Parties have exchanged offers and will discuss about demands. The EU don't foresee complete liberalisation for Tunisian olive oil and would ask for market access through quotas at reduced or zero duty in the Tunisian market. The aim of parties is to conclude negotiations at the beginning of Chair explained that exports from Morocco would rise to tons, according to forecasts, and asked whether Syria is also envisaged for negotiations. The Commission argued that current imports in the EU would correspond to bottled oil and that they are aware of the forecasts foreseen in the "Plan Maroc Vert" but the results should been expected in 10 years. An agreement with Syria exists, but dates from 2001 and is blocked at the Council for political reasons. 5. Application of EU legislation on health and nutritional claims The Commission reminded the main provisions of the legislation on health and nutritional claims. Health claims have to be scientifically proven. The nutritional profiles include average values in the range of which the health claims can be labelled on products. EFSA is currently working on a positive list of health claims. A representative of farmers asked about the date when positive claims could be used on labelling. The Commission gave a press release in September which gives the date of June 2011 as deadline for the EFSA assessment. Following the assessment, the claims would have to be voted, which is expected for end Developments on the food supply chain The Commission gave a presentation of the work on the food supply chain. The key challenges found for the food supply chain are: the sub-optimal relationship between stakeholders, the lack of transparency of price formation, the fragmentation of the internal market and low competitiveness of the agro-food sector. The discussion on this issue continues in the High Level Forum both at Sherpa level and under four expert platforms: business to business, the food price monitoring tool, the competitiveness in the agro-food industry and agro-logistics. Chair asked how the recommendations of the European Parliament (the Bové Report) will be taken up by the Commission. A representative of trade underlined that there are certain aspects which are not taken up in the general rules (i.e. the problem of public prices offered by the distribution chains in Spain). Chair confirmed that in other EU countries the same trend as in Spain can be observed. A representative from the environmentalists asked whether there is a quality problem and how it could be solved. A trade representative underlined that the price problem can be found in all EU states and that it could be an issue of competition (dumping practices). For Italy this is a problem as well and a representative of farmers asked the Commission to determine the exact role of the distribution chains in the price fall and the impact on olive oil quality.

4 4 The Commission is looking at the recent discussions in France with respect to sale at a loss. The Bové Report brought a number of recommendations which are now under consideration in terms of feasibility and a number of initiatives should be taken during the next months. A representative of workers drew attention on the actions and financing allocated to improve olive oil quality while there is no instrument to counteract the position of the supply chains, going in the opposite sense; this should be a high priority for the Commission. A representative of farmers underlined the price paid by producers on account of this situation and asked for action from the Commission. Chair underlined that the industry is suffering a lot on account of this problem as well. The Commission drew attention on the publication of the Commission Communication on the future of the CAP, released the day of the meeting. It was underlined that the Communication includes options for risk management and safety nets. 7. Information on developments in the International Oil Council The Commission presented the documents submitted by IOC Executive Secretary for approval in the IOC Council of Members in November: amendment of the method for the determination of the Delta ECN 42, method for the determination of sterols, and updated of the precision values of the method for the determination of waxes and alkylesters. On the organoleptic analysis for table oils advances have been made as well. A representative of farmers asked on the stage of discussion for esters and on the proposal to increase the linolenic acid to 1,2. Chair clarified that in Spain a reliable analytical method for ester determination has been developed and inquired whether this method could be taken up in the IOC. The method of alkyl-ester is under discussion in the Management Committee and should be taken up in EU legislation at the beginning of The method doesn t give indication on the authenticity of the olive oil but partially on the mixing of olive oil with oils of bad quality. The EU proposal, supported by Turkey, on linolenic acid indicated a limit of 1,1, while Australia proposed a 1,2 limit. The IOC drafted a study on campaign execution in Australia and the US. On promotion activities in general the Commission would like to see the IOC engaged in a specific program and expects feedback from stakeholders. Representatives of the industry underlined that a main priority would be Australia and the US and asked for more data on the study. A representative of the industry made reference to certain data which would suggest that alkyl-ester content change in time. The Commission answered that it is always welcome any scientific literature about this respect, but until now the opinion of the experts is that the oils below the proposed limits for alkyl-esters don't show a significant increment in its content during the self life. A representative of workers underlined the need to maximise the aid given under promotion programs. The Commission explained that the alkyl-esters are an indication of quality and a level of 50 mg is below the IOC standards. A trade representative questioned the validity of the methods put forward in order to avoid unfortunate developments at an international level. The Commission underlined that there has been full transparency of work at the IOC level and no doubts have been raised on the validity of the methods as such until now. On promotion, it was stated that the IOC offers grants twice a year. The next meeting of the Advisory Group will be organised on June 7 th, Disclaimer "The opinions expressed in this report represent the point of view of the meeting participants from agriculturally related NGOs at community level. These opinions

5 5 cannot, under any circumstances, be attributed to the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the here above information."