Olive Oil Displaces Debt at Heart of European Bottleneck

Photographer: Mario Proenca/Bloomberg

Empty olive oil bottles stand before filling at the Gallo Worldwide plant in Abrantes, Portugal. Close

Empty olive oil bottles stand before filling at the Gallo Worldwide plant in Abrantes, Portugal.

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Photographer: Mario Proenca/Bloomberg

Empty olive oil bottles stand before filling at the Gallo Worldwide plant in Abrantes, Portugal.

It had the same ingredients as Europe’s debt-crisis drama: a battle between north and south, British defiance, media jeering, and murky decision-making starring a cast of unidentified technocrats.

The conflict was put to rest yesterday: the European Union decreed that restaurants in its 27-nation market can continue to put refillable olive-oil bottles on tables, dropping a ban that was scheduled to take effect in 2014.

A week after a little-known committee endorsed the mandate, EU Agriculture Commissioner Dacian Ciolos scuttled it, pledging instead a regulation that “takes account of the lives of everyone, not only some, to avoid this sort of misunderstanding.”

The olive oil caper of 2013 will go down in history along with now-retracted bans on misshapen vegetables and criminal penalties for grocery-store disregard of the metric system as examples of European rules run amok -- even if many tales of EU over-regulation are more fiction than fact.

Single-use receptacles “would have cost us a lot of money,” said Damien Vanderhoeven, chef-owner at Coriandre, a Brussels restaurant that graces its tables with hard-to-find oils from Europe’s 1.9 million olive groves.

It all started last July with an Action Plan for the EU Olive Oil Sector, meant to boost quality, end overproduction, bolster incomes of family producers and protect consumers from buying substandard olive oil misleadingly or fraudulently labeled as the good, “extra virgin” stuff.

Photographer: Mario Proenca/Bloomberg

As the olive-oil diplomacy shifted into overdrive, a prominent role went to Britain, a longtime opponent of what it sees as excessive EU regulation. Close

As the olive-oil diplomacy shifted into overdrive, a prominent role went to Britain, a... Read More

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Photographer: Mario Proenca/Bloomberg

As the olive-oil diplomacy shifted into overdrive, a prominent role went to Britain, a longtime opponent of what it sees as excessive EU regulation.

Oil Superpower

While its global political ambitions have waned, the EU is the world’s lone remaining olive-oil superpower, accounting for 73 percent of production and 66 percent of consumption of a product in vogue as the staple of heart-healthy diets, EU data show.

The six-plank plan was welcomed by Greece, Portugal, Spain and Italy, which combine to produce more than 97 percent of the EU’s olive oil, much of it subsidized by the bloc’s 58 billion-euro ($75 billion) farming budget. From 2006 to 2009, for example, EU payments made up 48 percent of the average Greek olive grower’s income.

Plank two of the Action Plan contained the non-refillable-bottle idea. It would have required restaurants to put olive oil in “packages that cannot be re-used.” So instead of a corked bottle, sometimes with a pouring spout, sometimes adorned with a Mediterranean motif, the dining public would get a single-use jar, jug, flacon or plastic package.

By February, an EU majority was coalescing around the proposals. On May 14, agricultural attaches from 15 countries voted in favor -- enough to keep the idea alive but short of the supermajority needed to ram it through.

Skeptics’ ‘Grist’

It was “grist for the mill of euroskeptics,” France’s Le Figaro newspaper wrote.

The vote echoed the split between more productive northern creditor economies and less competitive southern debtor economies that has scarred Europe since the fiscal crisis broke out in 2009. Now northern consumers and southern producers were squaring off over olive-oil jugs.

The hardline debt-crisis trio -- Germany, the Netherlands and Finland -- voted against the ban, along with six others. Britain, Belgium and Hungary abstained. The 15 in favor included the five countries -- Greece, Portugal, Spain, Cyprus and olive-oil consuming Ireland -- drawing on debt-crisis aid.

“Save the jugs,” LYMEC, the youth wing of the pan-European Liberal party, reacted in a May 21 press release. It argued that the packaging industry would win and smaller businesses lose, to say nothing of restaurant-goers being deprived of the authentic bread-dipping experience.

British Concerns

As the olive-oil diplomacy shifted into overdrive, a prominent role went to Britain, a longtime opponent of what it sees as excessive EU regulation. One milestone in that campaign was the overturning in 2007 of a ban on the use of pounds and ounces in favor of metric measures on food labels (ignoring the fact that an earlier British government had been on board).

Coming at a sensitive time, with the U.K. debating pulling out of the EU, olive oil escalated into a matter of state. Prime Minister David Cameron addressed it after an EU summit in Brussels two days ago, saying: “This is exactly the sort of thing that Europe shouldn’t even be discussing, that shouldn’t even be on the table -- to make a forced pun.”

All eyes turned to the European Commission, the bloc’s executive agency and target of much British criticism. It was entrusted with the final decision in the wake of last week’s inconclusive vote. Ciolos, a Romanian with degrees in agronomy and horticultural engineering, saw the writing on the wall.

Abandoning the southern European olive-oil lobby, Ciolos decided that consumers deserve “the same level of importance.”

It wouldn’t be wise, he told reporters yesterday, “to force a decision because some member states are in favor and the others are against.”

To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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