Written by Ana Martinez Juan
The European Union (EU) is the largest producer (accounting almost three quarters) and consumer (accounting two thirds) of the olive oil in the world. Olive growing is a feature of sociocultural life in many Mediterranean regions. Olive trees are grown in Greece, Italy, Spain, Portugal, France, Cyprus, Slovenia and Malta. About 95% of the olive production in the EU is concentrated in Spain, Italy and Greece. Olive oil production and consumption is rising in the world driven by a public positive image.
To enhance this public image and to strength the olive oil industry and the position of the EU olive sector in world markets, the Commission presented to the Agricultural Council meeting an action plan for the EU olive oil sector in June 2012. The action plan looks into six areas:
– International Olive Council (IOC);
– Quality and control;
– Restructuring of the sector;
– Structure of the industry;
– Competition with third countries;
The action plan describes the findings and outlines the actions to be taken in each of the thematic areas. Most of these actions are covered in the reformed Common Agricultural Policy 2014-2020. The objective of this EPRS keysource is to show sources of information related to the topics set in the action plan for the EU olive oil sector.
Present and future of the Mediterranean olive sector / N. Arcas… (et al.). Mediterranean Agronomic Institute of Zaragoza (IAMZ-CIHEAM) and the International Olive Council (IOC), July 2013. 182 p.
This reports shows that olive cultivation constitutes a key element of the Mediterranean agricultural sector, and Mediterranean countries dominate world olive oil and table olive production and consumption. Production has increased dramatically in the last decades, partly due to the establishment of intensive olive plantations using new production systems. Nevertheless, traditional olive production systems should not be forgotten, as these systems are multifunctional and contribute to rural development, landscape conservation and protect the environment against erosion and desertification. Consumption of olive products has followed similar patterns, and non-traditionally consuming countries are becoming important consumers and importers.
Economic analysis of the olive sector / European Commission, Directorate General Agriculture and Rural Development, July 2012. 10 p. This brief is also available in Spanish , French and Italian .
This brief analyses the situation in the sector (production, structure of farms, area, yields and production, consumption, trade, stocks, olive industry, qualitative aspects and price) the analysis of supply/demand based on a medium-term view of oil production in the EU, the analysis of the economic situation of olive farms.
International Olive Council (IOC)
The first International Agreement on Olive Oil and Table Olives was signed in 1956 under the auspices of the United Nations (UN), more particularly United Nations Conference on Trade and Development (UNCTAD). The IOC was established in 1959 as the organisation in charge of the administration of the Agreement. The EU (represented by the Commission) and 16 countries (Albania, Algeria, Argentina, Egypt, Iran, Iraq, Israel, Jordan, Lebanon, Libya, Montenegro, Morocco, Syria, Tunisia, Turkey and Uruguay) are members of the IOC.
The latest agreement was signed in 2005 (the fifth since 1956) to regulate the market until 31 December 2014. This agreement, entitled the International Agreement on Olive Oil and Table Olives, 2005 , provides international protection for the geographical indications agreed on by members. It also puts relationships with professionals on an institutional footing and provides for international cooperation with representatives of the olive-products sector. Environmental protection is strengthened. This agreement is also aimed at improving the quality of the sector’s products and is intended to back up the advertising campaigns on the nutritional and therapeutic properties and benefits of olive oil and table olives.
On 15 September 2014 the Council adopted by written procedure a decision giving a mandate to the Commission to request a one-year extension of the existing agreement while waiting for the conclusion of a new agreement ( 2014/664/EU ). Procedure file of the Legislative Observatory: COM(2014)0438 .
Quality and control
Regarding the quality and control, the action plan mentioned the actions to be taken are the following: to strengthen quality controls, to protect the consumers, to improve the labelling and marketing standards and to strengthen quality and authenticity parameters.
Réglementations sur l’étiquetage et la présentation des huiles d’olive / Brigitte Pouyet, Véronique Ollivier. OCL 2014, 21(5) D508. 7 p.
Olive oil is the oil obtained solely from the fruit of the olive tree ( Olea europaea L.). It is marketed in accordance with designations and definitions: virgin olive oils are the oils obtained from the fruit of the olive tree solely by mechanical or other physical means under conditions, particularly thermal conditions, that do not lead to alterations in the oil, and which have not undergone any treatment other than washing, decantation, centrifugation and filtration. Olive-pomace oil is the oil obtained by treating olive pomace with solvents or other physical treatments. Analytical methods are essentials to distinguish between those different categories of olive oils.
Workshop on olive oil authentication: proceedings . European Commission, Directorate General Agriculture and Rural Development and Joint Research Centre, Institute for Reference Materials and Measurements, June 2013. 147 p. Summary of the proceedings (10 p.) and Posters (16 p.).
This workshop took place in Madrid on 10th and 11th June 2013. It gathered worldwide experts working in the field of olive oil authentication. The first day was divided into two sessions. The first one was devoted to the trade standards, regulations and fraud cases and the second one was focused on the state-of-art and challenges in olive oil authentication. The second day was based on an interactive approach under which the participants were asked to discuss the ways to detect soft deodorisation and adulteration of olive oil to ensure its authentication.
An overview of the authentication of olive tree and oil / Rayda Ben-Ayed, Naziha Kamoun-Grati, and Ahmed Rebai. Comprehensive Reviews in Food Science and Food Safety, vol.12-2, March 2013. 10 p.
Adulteration of virgin olive oil with less expensive oils is a serious problem for the public and quality control evaluators of olive oil. That is why olive oil authenticity has become a major issue for producers, consumers, and policy makers. In order to avoid fraud to consumers, it is crucial to study the traceability of olive oil. This review covers 2 important techniques, analytical, and molecular methods, used to characterize olive oil and detect possible adulteration.
A research call on olive oil authentication in the framework of Horizon 2020 was launched in December 2013.
Restructuring of the sector
The action plan already mentioned the “arrangements under the CAP reform” (still in negotiation when the plan was presented by the Commission), particularly the support to the olive oil sector via the second pillar: targeting a specific geographical zone or theme for the rural development programmes, agri-environmental and climate payments and investments for processing and marketing.
Agri-environmental schemes in olive growing: farmers’ preferences towards collective participation and ecological focus areas / A. J. Villanueva (et al.). Poster paper prepared for presentation at the EAAE 2014 Congress “Agri-Food and Rural Innovations for Healthier Societies” August 26 to 29, 2014 Ljubljana.
This paper tackles several issues under-studied concerning agri-environmental schemes (AES), namely requirements related to ecological focus areas (EFA) and collective participation. For this purpose, choice experiment was used to assess farmers’ preferences towards AES in olive growing of Southern Spain. A high heterogeneity was found, being identified four different classes of farmers, from potential participants to intermediate and non-participants.
LIFE among the olives: good practice in improving environmental performance in the olive oil sector / Gabriella Camarsa… (et al.). European Commission. Directorate-General for the Environment, 2010. 56 p. This report is also available in Spanish , Italian and Greek .
The EU is a global leader in olive production. The olive sector is particularly important in southern countries, where it represents a significant share of the agricultural economy. But the economic benefits of olive production come at a cost. Olive farming has become more intensive in recent decades and olive processing now produces significant and growing volumes of waste. This report examines how the LIFE programme is helping both olive growers and olive processors to improve their environmental performance, highlighting good practices and approaches emerging from LIFE projects that could be adopted more widely within the sector.
Structure of the industry
The action plan lists the action to be taken: to increase the size of producer organisations and to use the funding provided for in the second pillar to assist producer groups, to support for physical investment and to support marketing of products.
The reformed Common Agricultural Policy 2014-2020 extends the provisions on producer organisations, associations of producer organisations and interbranch organisations to all sectors ( Regulation (EU) No 1308/2013 on the common organisation of the markets). Producer organisations in the olive oil, arable and bovine meat sectors may also, subject to certain conditions, engage in collective negotiations on behalf of their members. Farmers will have also the opportunity, subject to certain conditions, to collectively negotiate contracts for the supply of olive oil, bovine meat, cereals and certain other arable crops. The funding for this will come from the rural development budget ( Regulation (EU) No 1305/2013 on support for rural development).
Olives: sector report / Constantine Iliopoulos, Irini Theodorakopoulou, Irene Tzouramani. .). Rapport commissioned and funded by the European Commission, Directorate General for Agriculture and Rural Development under the project Support for Farmers’ Cooperatives, November 2012. 42 p.
This report analyses cooperatives in the olive sector in the EU. First, the description presented in this report pay special attention to the drivers and constraints for the development of cooperatives. Second, the report identifies laws and regulations that enable or constrain cooperative development and third, identifies specific support measures and initiatives which have proved to be effective and efficient for promoting cooperatives and other forms of producer organisations in the agricultural sector in the olive oil and table olives sector.
Commodity chains, quality conventions and the transformation of agro-ecosystems: olive groves and olive oil production in two Andalusian case studies / Daniel Coq-Huelva, Manuel David García-Brenes and Assumpta Sabuco-i-Cantó. European Urban and Regional Studies 19, 2011. 16 p.
The olive oil commodity chain (OOCC) is very complex and has several kinds of agent with different positions and roles. Four main phases (agricultural production, olive milling, oil refining and commercial distribution) can be identified. The positions and drivenness levels associated with them are very heterogeneous. Quality conventions are basic elements in the daily working of the OOCC. This article analyses not only the different phases of the OOCC but also its associated conventions.
Supply currently exceeds demand in the EU. Awareness and promotion campaigns (olive sector is already a dynamic participant in the EU’s promotion activities) must pursue different aims, such as enhancing product image, boosting consumption and winning new markets. The EU finances promotion and information campaigns about its farm products, manufactured foodstuffs and production methods both inside and outside the EU. Olive oil is covered by these campaigns, among other products.
Competition with third countries
The action plan highlights the new producer countries of olive oil (beyond its historical home in the Mediterranean basin) should respect the IOC quality parameters and the Codex Alimentarius standard for olive oil .
L’économie mondiale de l’huile d’olive / Jean-Louis Barjol. OCL 2014, 21(5) D502. 5 p.
Although it accounts for less than 3% of the world edible oil market, olive oil is attracting growing interest from new countries, particularly thanks to the results of scientific research confirming the positive attributes of this “liquid gold” and its place in the Mediterranean diet. This interest is accompanied by a transformation of the structure of output and tougher competition between the producing countries as a new generation of producers in search of maximum returns lines up behind olive oil heavyweight Spain and the other traditional producing countries.
US countervail against EU olive oil subsidy: impacts in the US, Europe, and North Africa / Bo Xiong, Daniel Sumner, William Matthews. Poster presented at the Annual Meeting of the Agricultural and Applied Economics Association July 2014.
Trade and logistics: the case of the olive oil sector / Dimitrios Niklis (et al.). CIHEAM: Mediterra (chapter 11), 2014. Version in French .
This chapter aims at analysing different aspects of the olive oil sector in general (production, consumption trade and logistics). Situations of individual countries such as Tunisia, Syria, Lybia and Italy or the Greek Island of Creete will be highlighted as special illustrations.
Olive oil: conditions of competition between U.S. and major foreign supplier industries / United States International Trade Commission, Investigation No. 332-537, USITC Publication 4419, August 2013. 284 p.
This report describes and analyzes the factors affecting competition between the United States and major olive oil producing countries. It provides: an overview of global production, consumption, exports, and imports during 2008–12 and 2013 where available; an analysis of the factors impacting consumption in the U.S. market; profiles of the olive oil industries in the United States and other major producing countries; and an examination of competition between firms and countries in both the global and U.S. market.
La filière huile d’olive en Tunisie / Ines Gharbi, Manel Issaoui, Mohamed Hammami. OCL 2014, 21(2) D202. 6 p.
Tunisia is the largest southern Mediterranean country producing olive and olive oil. If we exclude the European Union, Tunisia is the world’s largest power in the sector of olive oil, deploying major restructuring efforts, modernization and improvement of the quality of its oil, accompanied by a significant expansion of surfaces. The challenge for Tunisia will be to provide continuous adjustment and to develop its competitive strategies allowing it to strengthen its competitiveness. This study, which forms a part of this concern, aims to refine this knowledge. It intend to study the Tunisian olive oil sector and the possibilities to improve its performance.
Potentiel de production et d’exportation d’huile d’olive tunisienne au marché européen: une étude Delphi / Boubaker Karray, Fatma Kanoun. OCL 2013, 21(5) D503. 6 p.
This research provides an estimate of the production and export of Tunisian olive oil to the European market in 2016. The estimate of exports was performed for two scenarios of total and partial liberalization of EU imports from third countries. The research uses the Delphi method. Used information comes from the results of a survey conducted in two rounds with 19 experts which perform different functions at the olive oil sector in Tunisia. The results show that the production of olive oil will reach 250 000 tons and exports to the European market will be potentially 224 000 tons at a partial liberalization and 206 000 tons at full liberalization. Tunisia will benefit more from partial liberalization than full liberalization which expose it to competition from other third countries producing and exporting.
Prospects for the olive oil sector in Spain, Italy and Greece: 2012-2020 / European Commission, Directorate General Agriculture and Rural Development, July 2012. 6 p.
These prospects for the olive oil sector until 2020 have been established on the basis of a detailed statistical analysis that takes into account the main historical trends and the foreseeable evolution of the sector over the next years. The methodology used for the projections varies depending on the type and the detail of the sources of information available for each country.
Structure and strategy of olive oil cooperatives: comparing Crete, Greece to Andalusia, Spain: case study report / Constantine Iliopoulos (et al.). Rapport commissioned and funded by the European Commission, Directorate General for Agriculture and Rural Development under the project Support for Farmers’ Cooperatives, November 2012. 65 p.
This report focuses on the interaction between cooperative structure and the strategies adopted by selected olive oil cooperatives in Crete, Greece and Andalusia, Spain. These two regions are significant olive oil producers. The olive oil cooperatives based in these two regions were chosen due to their structural, ownership, and governance characteristics, as well as their diverse marketing strategies, which enable us to address a number of key issues. The central issue addressed is whether structure has had a significant impact on the strategy adopted by the case cooperatives and, consequently, their success/failure and the coordination of the olive oil supply chain.
Les huiles d’olive vierges françaises: évolution, état des lieux / Christian Pinatel, Jacques Artaud. OCL 2014, 21(5) D505. 12 p.
France is a relatively small producer of virgin oils (5000 T) with only 0.22% of the world production. But French virgin oilive oils are characterized by its original, various and unique organoleptic characteristics while 30% of its national production benefits from one of the eight French Designation of Origin. Moreover, the ever growing production issued from organic farming already claims 15% of French national production.
Greece: olive oil annual 2014 / Ornella Bettini. United States Department of Agriculture, Foreign Agricultural Service, April 2014. 5 p.
Report Highlights: Greece is the world’s third largest olive oil producer after Spain and Italy. According to industry contacts, Greece’s 2013/14 olive oil production is projected to decline by 57 percent compared to the previous campaign, because of the severe drought of the summer. More than 80 percent of the Greek annual production is extra virgin olive oil. Per capita consumption of olive oil in Greece (20 Kg/year) is one of the highest in the world. Ninety percent of Greek olive oil is exported to the European Union: 80 percent in bulk and 10 percent under Greek brand names.
The Greek olive oil market and the factors affecting it / Marie-Noëlle Duquenne, George Vlontzos Discussion Paper Series, 18(4, November 2012. 21 p.
The objective of the research was to highlight the role that socio-economic and spatial attributes of consumers – households exert on their choices regarding not only the supply modes but also the price they are willing to pay for different categories of olive oil, especially the packaged one. Three aspects are successively examined as regards alternative characteristics of olive oil that are proposed: (a) the label, (b) the quality certification protocol and finally (c) the respect of environmental criteria in the production process.
L’oléiculture grecque entre commerce international et circuits courts / Marie-Noëlle Duquenne, Laurent Rieutort. 2010, 15 p.
The article presents a review of the Greek olive oil sector (geography of production, actors processing and distribution). This is fundamental in terms of geography (800,000 ha cultivated), economic (the fourth largest producer of olive oil) and cultural (world’s largest consumer per capita).
Norme e regole per la commercializzazione dell’olio di oliva: luci e ombre nelle dinamiche di mercato / Sabrina Giuca. Istituto Nazionale di Economia Agraria (INEA), 2014. 162 p.
This report reported the proceedings of a INEA seminar entitled “Norme e regole per la commercializzazione dell’olio di oliva. Luci e ombre nelle dinamiche di mercato” is carried out careful analysis of marketing strategies to enhance the quality of the product Italian and deepen specific matters concerning the interpretation and the application of EU and national legislation.
The Italian olive oil industry in the global competitive scenario / Eugenio Pomarici, Riccardo Vecchio. Agricultural Economics, 59, 2013. 12 p.
The current paper analyses the reasons behind the difficulties of the Italian olive oil industry to compete in the world markets. The analysis highlights that these complexities can be related with two core factors: stagnant demand in the main producer/consumer countries and strong competition arising from the Spanish olive oil industry increasingly involved also in processing and trade. In addition, these weakness factors are boosted by the market power exerted by large retail chains that are now the main channel in which olive oil is retailed in the domestic market.
Produzioni e redditi delle aziende olivicole in Italia / Greta Zilli e Alfonso Scardera. Istituto Nazionale di Economia Agraria (INEA), March 2013. 12 p.
This paper analyzes data on production and yields, the costs of production and the gross margin olive production process, information that can highlight the diversity of Italian olive. The paper shows as well the structure, the productivity and profitability of companies specializing in olive growing and concludes with an overview of the European context.
Il mercato internazionale e nazionale dell’olio di oliva . Istituto di servizi per il mercato agricolo alimentari (ISMEA), March 2012. 13 p.
This paper analyses the production, consumption, prices and international trade of olive oil with the focus on Italy.
The economic impact of modern retail on choice and innovation in the EU food sector: case studies report . European Commission, Competition, September 2014. 158 p. Olive oil in Spain (pages 106-131).
The olive oil sector has witnessed a global push towards a premiumisation of the product. This premiumisation occurs through many different innovations: new formats are created; olive oils are differentiated based on the origins of the olives, new packaging (sprays, cans) are set up, there is higher quality packaging and new and different qualities of oil. These innovations have been driven by marketing and promotional campaigns, launched both by producer organisations and institutional players in order to develop consumer knowledge on the health benefits of olive oil. However, despite many innovations registered in the past eight years, not many have proven a commercial success in the domestic market: the demand for innovation is still mostly destined for the export market.
Olive oil production in Spain set to rebound / Marta Guerrero. United States Department of Agriculture, Foreign Agricultural Service, February 2014, 16 p.
Report Highlights: After plummeting in 2012/13, when prolonged dry weather halved yields, Spain’s olive oil production is anticipated to recover to average levels in 2013/14. The higher supply will allow for a recovery of exports and stocks. No major changes are anticipated in domestic consumption.
Aceite de oliva: la excelencia del oro líquido / Angel Marqués de Avila. Mercasa, Distribución y consumo 38, 2013. 38 p.
This article highlights the importance of the olive oil sector in the Spanish agriculture and in the world. The article shows the varieties of the olives, the types of olive oils and brings some statistics on the surface of the olive groves in Spain and on the olives harvest 2012/2013.
Adaptación de las exportaciones españolas del aceite de oliva a la demanda mundial / Encarnación Moral Pajares, Juan Ramón Lanzas Molina, Pedro Jesús Cuadros Solas. Boletín Económico del ICE, junio 2012. 12 p.
Consumption of olive oil is increasing in many countries that are not producers or maintain a level lower than the demand output, as is the case of the United States or Australia. The aim of this paper is, first, to analyze how it is evolving international trade of this food product and, secondly, to assess the degree of adaptation of the Spanish deal olive oil to the world market demand.
Implicaciones de la PAC 2014-2020 para el sector oleícola / Mar Velasco Gámez, Juan Vilar Hernández y Raquel Puentes Poyatos. XIV Reunión Económica Mundial, 2012. 10 p.
The reform of the Common Agricultural Policy (hereinafter PAC) for the six years 2014-2020, will have major implications for the food industry, especially for the olive oil sector in terms of budget reduction and modification of support mechanisms. The aim of this paper is to analyze the extent on the olive oil sector of the measures proposed in the PAC 2014-2020. 2012. 10 p.
Olive oil: market picture for 2013/14 and forecasts for 2014/15 . International Olive Council, September 2014. 5 p.
With the crop year now closed, the data coming in from countries – as yet provisional – give a world production figure of 3 164 000 t, up by 32 pc on the previous season, and world consumption of around 2 996 000 t.
EU olive oil farms report: based on FADN data / European Commission, Directorate General Agriculture and Rural Development, February 2012. 84 p.
This report analyses the trends of the farms specialized in olive oil production over the period 2000-2010. It analyses structures, costs of production, margins and income indicators. The objective is to identify the characteristics of farms in economic difficulty and those in a better situation. The main source for this report is the Farm Accountancy Data Network (FADN) database, complemented by Eurostat data and information obtained from national authorities. It covers the three main producers: Spain, Italy and Greece.
Related legislative procedure(s)
Council Decision of 15 September 2014 on the position to be adopted on behalf of the European Union within the Council of Members of the International Olive Council concerning the prolongation of the 2005 International Agreement on olive oil and table olives ( 2014/664/EU ).
In addition to the Council Decision referred to above, the Directorate-General for Agriculture and Rural Development of the Commission devotes a webpage about the legislation on olive oil .