‘A solution in search of a problem…’ California olive oil row heats up as producers clash over labeling bill

By Elaine Watson contact

- Last updated on GMT

Left: 100% California olive oil; Right: The Global Blend range. Picture credit: California Olive Ranch
Left: 100% California olive oil; Right: The Global Blend range. Picture credit: California Olive Ranch

Related tags: Olive oil, AB 535, California Olive Ranch

California’s olive oil producers are clashing over proposed state legislation on olive oil labeling that supporters say is essential to ensure consumers are not being misled, and critics say is a blatant attempt to restrict competition.

Existing law requires that the term ‘California Olive Oil’ can only be used on products in which 100% of the oil is sourced from olives grown in California.

AB 535, ​however, goes a step further by prohibiting “any reference to California orany other representation on the principal display panel”​ of olive oil containers that might lead consumers to think all the oil was sourced in the state, including the term ‘California olives, or something substantially similar​” unless 100% of the olives used to produce the oil were grown in California.

Cecilia Aguiar-Curry: Consumers are being misled

According to a press release​ issued by Assembly Member Cecilia Aguiar-Curry, the bill “protects Californian olive growers and manufacturers from being undercut in the market by oils that benefit from using the ‘California’ name to mislead consumers about what they’re buying ​[she cites concerns about blended products featuring “as little as 14% California olive oil​”].”

She added: "Through a loophole in current law, a bottle of olive oil may be advertised as a 'California' brand or a 'California' company, but the fine print will specify that the oil inside the bottle is not derived entirely from California olives..​. Our State’s name should not be used as a cynical marketing ploy to give the impression you’re buying something you’re not.​"

According to California Olive Ranch​ CEO Michael Fox, however, this is a blatant attempt – backed by some of his competitors - to go after his company’s ‘Global Blend’​ extra virgin olive oil series, which falls foul of AB 535 because it is sold under the California Olive Ranch brand but combines extra virgin olive oils from California and other growing regions in Latin America and Europe (AB 535 prohibits firms from making “any reference to California​” on products featuring anything other than 100% California olive oil). 

As it is currently written, AB 535 criminalizes the selling of olive oil with truthful and accurate brand names containing geographical terms and establishes a concerning precedent for regulating businesses with geographic names and trademarks in other food and agriculture industries.” Michael Fox, CEO, California Olive Ranch

California Olive Ranch: 'Bill would basically outlaw use of the word 'California' on a label, unless it's with 100% California olive oil' 

Each bottle in the three-strong Global Blend clearly states on the front of the pack that a) it is a ‘Global Blend,​ and b) it contains a ‘A global blend of oils from Argentina, Chile, Portugal, California’ ​and as such would not be confused with the company’s core product line 100% California-grown olive oil, Fox told FoodNavigator-USA.

“We started blending high-quality oil from other regions as a result of a crop disaster​ [in 2017/18] when we only produced a third of what we needed to produce​ [initially branded as the ‘Destination Series,' the blends originally featured the strapline ‘Grown globally, crafted in California’ but was rebranded in early 2019 as the Global Blend' series], but when we had our follow-on harvests we were able to relaunch our 100% California Olive Oil products.”

'This is a violation of our first amendment commercial speech rights'

He added: “We have kept what we now call our ‘Global Blend’ series in market​ [which now accounts for 70% of sales] because it helps us manage the fluctuations in our California supply and allows us to have a more accessible price point for consumers to come in at.

“But our competitors in California saw it as, you know, something that they didn't approve, and so they recruited an assembly member, and led the charge on this bill to basically outlaw use of the word 'California' on a label, unless it's with 100% California olive oil.”

Not only is AB 535 a “solution in search of a problem​,” he claimed, “It’s a violation of our first amendment commercial speech rights and federal trademark law.”   

He also rejected the argument that the Global Blend series was bad for California olive growers, given that “the average price per liter of 100% California olive oil in the fall of 2018 was $16 compared to $20 today​ [he cited IRI MULO data 12 weeks ending May 14, 2021 vs. 12 weeks ending September 2018] and California producers, excluding California Olive Ranch, continue to grow significantly faster than the category.”

He added: “California producers are doing fine, prices are up.”

COR_Michael Fox 3
Michael Fox: 'AB 535 establishes a concerning precedent for regulating businesses with geographic names and trademarks in other food and agriculture industries...' Picture credit: California Olive Ranch

This bill does a disservice to consumers by assuming that they cannot easily discern between a brand name and clear labeling of country of origin.” Vincent Ricchiuti, Enzo Olive Oil Company

Amendments on the table

So what happens next?

While the bill passed comfortably in the Assembly, said Fox, it has yet to have a vote in the Senate. His hope is that amendments can be crafted that would permit blends and protect trademarks such as California Olive Ranch, but provide further clarity on labels, perhaps with respect to how much California extra virgin olive oil is within a blend, for example.

We put several​ [suggestions] forward and that's what folks are considering right now... 

For the California olive oil industry to be successful, we don’t need AB 535, we need to attract new customers with innovative thinking like high-quality blends that allow us to bring award-winning oils to consumers at accessible price points.” 

Other stakeholders opposing AB 535 include the California Retailers Association, The Mill at Kings River, Knaughty Farms, Corning Olive Oil Company, Enzo Olive Oil Company/P-R Farms, California Olive Ranch, Imperial Olive Mill, Cal Harvest Marketing, The Olive Oil Factory, Alfa Laval, Apex, Valley Farm Transport, Wawona Frozen Foods, and the Fresno Chamber of Commerce.

As it stands, the bill is unconstitutional, Milad Emam, an attorney for the Institute for Justice, told the Olive Oil Times​: "Just​ as reasonable consumers know that Kentucky Fried Chicken has products fried outside Kentucky, they know that olive oil with ‘California’ in a trademark sometimes consists of out-of-state olives.”

However, Greg Traynor, co-owner of 43 Ranch​,​ told the publication that "trading on our region and name with a product that is not even close to a majority from our region undermines all of us that are trying to do business and promote our product as a California extra virgin olive oil."

Olive-oil-GettyImages-MarianVejcik
GettyImages-MarianVejcik

Founded in 1998, California Olive Ranch​​​ grows multiple cultivars in California including Arbequina, a broadly planted cultivar in Spain producing a milder fruitier oil and a Spanish cultivar called Arbosana boasting a ‘complex and nutty’ floral, herbaceous, flavor profile.  It also buys olive oil from multiple growers in California as well as growers in Argentina, Chile, and Portugal.

According to IRI MULO (multi-outlet) data, US retail sales of olive oil rose 7% in the 52 weeks ending May 16, 2021, while dollar sales at California Olive Ranch were up 22% YoY over the same period, said the company.

While domestic olive production (which is mostly in California) only accounts for a small fraction of US consumption, California acreage is steadily expanding, said Fox. “We just planted two million trees over the past year and many other producers are adding acreage.”

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