Olive oil marketing regulations are at the centre of a political storm in the UK following newspaper reports that the EU Commission proposes to ban the use of olive oil jugs and dipping bowls in restaurants from 1 January 2014 (see, for example, the Daily Telegraph and Guardian reports).
The proposal is reminiscent of EU rules preventing the sale of crooked cucumbers (repealed in 2009). Apart from the substantive issues around the merits or otherwise of the proposal itself, the issue throws light on the working of the EU’s comitology system as well as raising questions about the balance between maintaining uniform conditions of competition within the EU while also respecting the principle of subsidiarity.
The proposal is found in a draft Commission implementing regulation amending an earlier implementing regulation on the marketing of olive oil in the Community. Part of the background to this regulation is the evidence of extensive fraud in the marketing of olive oil – olive oil is reputed to be the most adulterated agricultural product in the EU (see this interview with Tom Mueller in the New Yorker based on his book Extra Virginity: The Sublime and Scandalous World of Olive Oil).
In its amending regulation, the Commission wants to further tighten up the regulations on the labelling of olive oil and improve controls and compliance but it also wants to extend the scope of the marketing regulations to olive oil provided in restaurants and bars. The alleged purpose of this latter amendment is “to ensure the quality and authenticity of oils sold to the final consumer” in these establishments.
Background to the decision
The proposal first saw the light of day in the Commission’s action plan for the olive oil sector published in 2012 where it was suggested to ‘encourage Member States to require the use in the hotel and catering industries of packages that cannot be re-used.’ The action plan was produced in response to falling margins and operating income over the past ten years in the olive oil sector due to increased production costs, low sale prices and stagnating labour productivity, resulting in low incomes for many olive growers.
The action plan emphasised that a more balanced market could be achieved, among other means, by measures to enhance the public image of European olive oil and to improve consumer protection and information.
It is worth quoting extracts from the preamble to the amending implementing regulation (where paragraph 2 is the one that has sparked the current controversy):
(1) Commission Implementing Regulation (EU) No 29/2012 of 13 January 2012 on marketing standards for olive oil lays down specific standards for retail-stage marketing of olive oils and olive-residue oils. It is necessary to lay down additional standards and to improve effective compliance control with these standards in order to better protect and inform the consumer.
(2) In order to ensure the quality and authenticity of oils sold to the final consumer in hotels, restaurants and pubs and bars, it is appropriate to include the availability of bottled oil in establishments in this sector within the scope of Implementing Regulation (EU) No 29/2012. These establishments should also be obliged to use oil bottles equipped with an opening system which cannot be resealed after the first time it is opened, together with a protection system preventing them from being reused once the contents indicated on the label have been finished.
(3) Several scientific studies have demonstrated that light and heat have a negative impact on the evolution of the quality of olive oils. Any particular storage conditions should therefore be clearly indicated on the label to ensure that the consumer is well-informed on the best conditions for preservation.
(4) In order to help the consumer to select products, it is crucial that the mandatory particulars indicated on the label are easily readable. It is therefore necessary to establish rules on legibility, particularly regarding the size of the printed characters, the consistency of the various blocks of text and the concentration of mandatory information in the same field of vision. To ensure that labels are easily readable, the characters should be between two and four millimetres high depending on the volume of the container.
(5) In order to enable the consumer to be sure that the product is fresh, the optional marking of the harvest year should only appear on the label when 100 % of the contents within the packaging comes from that harvest….
In fact, since the Agricultural Council adopted the action plan in June 2012, olive oil prices in the EU have shown a steady improvement (reader’s warning: this is definitely an example of correlation and not causation given that the recommendations in the action plan have not yet taken effect). The trend in EU prices for extra virgin olive oil are shown in the figure, with the red line for Spain (which is the most important producer) being the most important. Spanish extra virgin olive oil prices now lie at €2.84/kg, showing 60 per cent growth on year-ago prices and regaining the level of September 2006.
Source: International Olive Council
Requiring olive oil served at restaurant tables to be served in tamper-proof bottles seems an excessive reaction to the problems of olive oil adulteration. There is of course the possibility that the olive oil has been adulterated by a cheaper vegetable oil, but restaurant owners more than most have an incentive to maintain the quality. And olive oil available on the table or in dipping bowls is a condiment rather than something that the customer has explicitly purchased.
Other objections have also been raised (as listed in UKIP MEP Roger Helman’s post on the topic) – it will increase food waste, require additional amounts of packaging, discourage artisanal production and favour the use of less healthy fat alternatives. In the light of these seemingly well-founded objections, how has the decision been made?
The comitology procedure
The proposed decision is an example of the exercise by the Commission of its delegated powers under the single CMO regulation. Since the entry into force of the Lisbon Treaty, the operation of this comitology system has been overhauled. Implementing regulations for the CAP are governed by the examination procedure (set out in Regulation (EU) No 182/2011 of the European Parliament and of the Council) laying down the rules and general principles concerning mechanisms for control by member states of the Commission’s exercise of implementing powers).
The examination procedure requires that draft Commission implementing regulations are considered by a management committee composed of representatives of the member states. The committee takes decisions by qualified majority voting. Where it delivers a positive opinion, the Commission adopts the implementing act. Where it delivers a negative opinion, the Commission has the options to either submit an amended act or to refer the matter to an appeal committee ‘which should meet at the appropriate level’ but again composed of member state representatives.
In the case where the management committee offers no opinion (because there is neither a qualified majority in favour nor against), the Commission may adopt the implementing act, except under some specified conditions. These conditions cover some specific legislative areas such as taxation or health and safety, or where the basic act provides that the implementing act falls when no opinion is delivered, or where a simple majority of the component members of the committee opposes it. That is, a simple majority of member states against the implementing act would prevent it from entering into force.
In addition, both the Council and Parliament have a right of scrutiny to object if either feels that an implementing act “exceeds the implementing powers provided for in the basic act.” However, the Commission is only required to respond to the criticism but not necessarily to withdraw the act, and the right of scrutiny only extends to the formal powers of the Commission and not to the substance of the implementing act itself.
Commission can proceed
In the case of the amendment to the implementing regulation on the marketing of olive oil, the management committee could not express an opinion in an indicative vote at its February meeting (the voting was 161 votes in favour, 131 votes against and 53 abstentions) and with a majority of member states in favour. The regulation was tabled again at the May management committee meeting but the summary report of that meeting is not yet available. However, one assumes from the press reports that the original ‘no opinion’ vote was confirmed. Thus, the Commission is now free to go ahead and adopt the amending regulation.
Eyebrows have been raised in the UK because it was among those countries that abstained despite its well-known disdain for micro-management by Brussels. This vote was explained by a Ministry official on the grounds that, although the UK opposed the extension of marketing rules to restaurants, it was in favour of the other elements of the regulation covering labelling and compliance. There has also been criticism that the UK (and other member states) are represented on the management committee by officials and thus that decisions of this kind are taken by technocrats, although one assumes that these officials are following political instructions from their home ministries.
This decision seems to have been made as a way to help olive oil producers hit by rising operating costs and falling profits in recent years, even if the market situation has now turned for the better since that decision was made. The very slight risk of the adulteration of olive oil in bars and restaurants does not seem to justify the draconian solution adopted by the Commission.
Photo credit: Roger Helmer