Staff Writer
Columbus CEO

c.2013 New York Times News Service

MADRID — Every morning, cafes here fill up with people enjoying a typical Spanish breakfast, including pouring olive oil out of a generic glass cruet onto a slice of toasted bread.

The traditional cruet, however, will be replaced by a labeled, sealed and nonreusable bottle or other type of container under stricter oil bottling rules that take effect Wednesday.

Spain is the world’s largest producer of olive oil. The new regulations were created mainly to improve food hygiene. But oil producers also hope the rules will help them build stronger recognition for their brands and even bolster sales and exports to markets like the United States, where Spanish oil has played second fiddle to Italy’s.

Spain acted on its own after Germany and other North European countries, which consume but do not produce olive oil, blocked a proposal by the European Commission last spring to impose such legislation across the 28-nation European Union.

Northern countries said tougher rules would produce both additional costs and more waste, with used and half-empty bottles thrown out rather than reused. British Prime Minister David Cameron also pilloried the regulatory plan as evidence of unnecessary interventionism by Brussels bureaucrats. Olive oil, Cameron claimed last May, is “exactly the sort of area that the European Union needs to get right out of, in my view.”

A similar debate has taken place within Spain. But it has been more subdued because the Madrid government clearly sided with oil producers, saying stricter rules would raise health safety, by guaranteeing the oil’s authenticity, as well as give consumers an opportunity to identify the quality and origin of their oil.

Producers have struggled to raise brand awareness among consumers — and hence the value of their product — even in the olive heartland of Andalusia, in southern Spain.

“Traceability is important for food security, but we must also make people much more aware that olive oil is not something banal but instead noble and very special,” said Álvaro Olavarría, the managing director of Oleoestepa. The company has annual revenue of 75 million euros, or about $103 million, and claims to have been the first Spanish producer to sell olive oil in nonreusable bottles, just over a decade ago.

The Spanish hotel federation, which represents more than 100,000 businesses, has opposed the stricter rules, echoing the recent concerns in Germany and other northern countries.

With Spain recently emerging from a two-year recession but still struggling with anemic household spending, “we’re facing an unjustified and unnecessary change that adds costs at the wrong time,” said Emilio Gallego Zuazo, the secretary general of the federation.

Cafe owners now generally fill their cruets from 5-liter plastic containers. The labeling rules do not apply to olive oil used within the kitchen, but the cost of the oil that has been offered in cruets is likely to increase three- to fivefold, depending on what alternative bottling and labeling is selected, according to Gallego Zuazo.

Some restaurants may decide to charge for premium olive oil, but most are expected to continue providing bottled oil for free. Another perhaps cheaper option is to switch to single-serve packets like those used for ketchup or mayonnaise.

The olive oil sector disputes any doomsday financial forecasts. Primitivo Fernández, the director of Anierac, Spain’s national association of bottlers and distributors of olive oil, calculated that the cost of a regular breakfast should increase by as little as one cent, which would also be less onerous than the cost of past packaging reforms for other produce like butter.

As to the concern over waste, Fernández said that “if we’re really worried about environmental damage, then let us talk first about problems like the bottling of Coca-Cola.”

Overall, Fernández said, “the consumer has until now had no idea where the oil comes from, whether it has been blended or even how to complain if the taste isn’t right or fraud is suspected.”

Some upmarket establishments have broken ranks with the hospitality sector, welcoming the bottling rules as part of their efforts to raise the reputation of Spanish gastronomy.

“Spain is the world’s number one producer but doesn’t have the consumer culture that such a ranking deserves,” said Jesús Santos, who owns a handful of restaurants in Madrid and Bilbao, serving mainly Basque cuisine.

As with wine, Santos added, “consumers should ultimately be encouraged to order a specific oil rather than just get whatever is in the kitchen.”

The European Union produces three-quarters of the world’s olive oil, mostly around the Mediterranean. For this harvest year, Spain is set to produce 1.5 million out of the European Union’s 2.3 million tons of olive oil, according to estimates provided by the European Commission. Italy ranks second, with an estimated 450,000 tons, followed by Greece and Portugal.

Another longstanding Spanish frustration is that Italy has more successfully focused on exporting the highest quality of olive oil, known as extra virgin, even as Italy itself is the largest importer of Spanish oil, which it buys mostly in bulk.

One explanation for Italy’s exporting clout is that pizzerias and other Italian restaurants in countries like the United States helped promote its oil long before Spain started targeting such markets. Another reason is that Italy was among the six European nations that established in 1966 a common market and subsidy system for olive oil — 20 years before Spain and Portugal joined the European Union and also became eligible for such farm subsidies.

“The rules of the European oil market were tailor-made by and for Italy,” said Olavarría of the olive oil company Oleoestepa. “The worldwide perception is still that olive oil is far more Italian than Spanish, so it’s been about playing catch-up and trying to get some facts straight.”


Italian and Portuguese producers have also benefited from stricter domestic labeling rules for oil, Olavarría said, “which is something that Spanish producers have been demanding for decades but unfortunately were made to wait for until now.”

Even though the rules will still not apply throughout the European Union, “it now also gives Spain a chance to ensure every visitor goes home with a clearer appreciation of our oil,” he added.

Spain is expected to welcome about 60 million visitors in 2013, making it one of the world’s biggest tourism destinations.

The jury is out on whether the new law and higher brand recognition can bolster sales. Gallego Zuazo from the hospitality federation said that “this compulsory change will not bring the positive effect that producers are expecting.”

In fact, “putting oil on the table for free has been key in helping raise the popularity of oil,” he added. “This could go against that.”

A group of people having breakfast recently at Los Chicos, a Madrid cafe, said they understood that producers wanted to increase sales but not why that required turning cruets into a serious problem.

“I’ve used them for 70 years and I’ve never been sick,” said Juan Marín, a pensioner. “But food has gotten more and more expensive and that certainly makes me feel sick.”