BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 818|
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                                 THIRD READING


          Bill No:  SB 818
          Author:   Wolk (D)
          Amended:  3/30/11
          Vote:     21

           
           SENATE HEALTH COMMITTEE  :  9-0, 4/6/11
          AYES:  Hernandez, Strickland, Alquist, Anderson, Blakeslee, 
            De León, DeSaulnier, Rubio, Wolk

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    Food labeling:  olive oil

           SOURCE :     Author


           DIGEST  :    This bill revises current definitions of olive 
          oil and grades of olive oil and olive-pomace oil in state 
          law to conform to recently established United States 
          Department of Agriculture (USDA) standards.

           ANALYSIS  :    

          Existing federal law:

          1. Establishes standards, based on international standards, 
             for the various grades of olive oil and olive-pomace oil 
             under the Agricultural Marketing Service (AMS) Division 
             of the USDA. 

          2. Provides definitions for extra virgin olive oil, virgin 
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             olive oil, olive oil, refined olive oil and olive-pomace 
             oil, and establishes the hierarchy for virgin olive oil 
             grades. 
           
          Existing state law:

          1. Requires the Department of Public Health to enforce 
             various provisions of law regarding the manufacture, 
             blending, production, and sale of olive oil.

          2. Conforms olive oil definitions, grades and labeling 
             requirements to international standards.

          3. Authorizes the addition of vitamin E to specified olive 
             oil.

          4. Permits a consumer to re-use a clean olive oil 
             container, can, or drum.

          5. Specifies that olive oil labeled as California olive oil 
             must be made from California olives.  

          6. Permits the blending of olive oil if the contents and 
             proportions of the blend are prominently displayed on 
             the label. 

          This bill:

          1. Makes various conforming changes in state law to conform 
             to federal standards, based on international standards, 
             which include objective criteria for the various grades 
             of olive oil and olive-pomace oil, including definitions 
             for extra virgin olive oil, virgin olive oil, refined 
             olive oil and pomace-olive oil, as specified.  

          2. Prohibits olive-pomace oil from being labeled as olive 
             oil.

           Background
           
           Olive oil
           
          Olive oil is a monounsaturated fat, which has been promoted 
          in recent years as good for the heart and possibly a hedge 







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          against developing certain cancers.  The Center for Science 
          in the Public Interest has determined that all research 
          suggests that olive oil is the safest and healthiest, or 
          the least damaging to the human system in terms of oil or 
          fat. 

           Olive oil production in the European Union  

          The European Union (E.U.) is the world's leading producer 
          of all categories of olive oils, accounting for 
          approximately 80 percent of production, yet they have 
          consumed approximately 70 percent of that production 
          since1986.  Olive oil is produced in Italy, Greece, Spain, 
          Portugal, France, Tunisia, Turkey (an E.U. candidate 
          country), Syria and Morocco.  The International Olive 
          Council (IOC) develops standards of quality used by major 
          olive oil producing countries, including Spain, Italy, 
          Greece, Portugal and Turkey.  The IOC operates under E.U. 
          established regulations for olive oil, which are consistent 
          with CODEX Alimentarius definitions of the products, which 
          is an internationally used index.

          A 2007 New Yorker article reported that in 1997 and 1998, 
          olive oil was the most adulterated agricultural product in 
          the E.U., prompting the E.U.'s anti-fraud office to 
          establish an olive oil task force.  The E.U. also began 
          phasing out subsidies for olive oil producers and bottlers 
          in an effort to reduce crime, and after a few years it 
          disbanded the task force.  Yet fraud remains a major 
          international problem: olive oil is far more valuable than 
          most other vegetable oils, but it is costly and 
          time-consuming to produce-and surprisingly easy to doctor.

           Olive oil production in California
           
          California produces 99 percent of the olive oil in the 
          United States. The olive was first brought to California in 
          the late 1700s by Franciscan padres who journeyed north 
          from San Blas, Mexico.  Distributed from San Diego, olive 
          trees were soon in production at all missions along the 
          coast south of San Francisco.  As an agricultural product, 
          quality olive oils are in high demand, and the state is 
          home to over 300 artisan olive oil producers, including the 
          largest estate grown olive oil producer in the nation.  







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          More than 99.5 percent of commercial olive acreage in 
          California is located in the interior valleys of central 
          California, although olive trees grow throughout the state. 
           Economic advantages such as suitable soils, water 
          availability, and low land prices have resulted on the 
          current distribution and concentration of olive acreage in 
          the central valley.  In the northern Sacramento valley, the 
          counties of Butte, Glenn and Tehama have 33 percent of the 
          state acreage, and in the southern San Joaquin Valley, the 
          counties of Fresno, Kern, Madera and Tulare have 62 percent 
          of the acreage. 

          Unlike wine, virgin olive oil does not need to be aged to 
          create complexity.  The faster the fruit is crushed, the 
          fresher the product will be due to the esterification 
          reaction that occurs over time between free alcohols and 
          free fatty acids.  According to the COOC, California olive 
          oil producers are able to bring their fresh product to 
          market sooner than international counterparts, while most 
          imported olive oils can arrive months, sometimes even 
          years, after they are pressed.

           Olive oil standards
           
          Voluntary U.S. grade standards are issued under the 
          authority of the Agricultural Marketing Act of 1946, which 
          provides for the development of official U.S. grades to 
          designate different levels of quality.  The standards are 
          designed to facilitate orderly marketing by providing a 
          convenient basis for buying and selling, establishing 
          quality control programs and determining loans.  The 
          standards also serve as a basis for the inspection and 
          grading of commodities by the Federal inspection service to 
          approve the designation of U.S. grades.   

          Effective October 24, 2010, the U.S. established new 
          standards for grades of olive oil and olive-pomace oil 
          under the AMS Division of the USDA.  This is a revision of 
          the U.S. standards that have been in place since 1948.  
          According to the USDA, these revised standards will provide 
          a common language for trade and provide consumers more 
          assurance of the quality of olive oil they purchase.  This 
          revision could potentially affect more than 500 domestic 
          olive oil producers and growers.  In 2008, U.S. production 







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          was 500,000 gallons (about 3.8 million pounds).  Domestic 
          olive oil consumption is roughly 454 million pounds per 
          year, mostly imported.  

          The new U.S. standards are almost identical to the 
          requirements of the IOC Trade Standard, with a slight 
          difference in regard to the natural chemistry of California 
          olive oil.  The U.S. standard allows for slightly higher 
          levels of campesterol (4.0 in the IOC and between 4.0 and 
          4.5 in the U.S. standard) and linolenic acid levels (1.0 in 
          the IOC and between 1.0 and 1.5 in the U.S. standard) but 
          subjects the olive oil found to be in these ranges to 
          further testing.  The sensory standard for the IOC requires 
          a median of defect score to be between zero and 3.5, in the 
          U.S. standard the range is between zero and 2.5, which 
          means the IOC allows for a slightly higher level of median 
          of defect, as rated by a sensory panel.  

           Prior Legislation
           
          SB 634 (Wiggins), Chapter 694, Statutes of 2008, clarifies 
          the definition of olive oil,  repeals previous licensure 
          provisions, conforms olive oil definitions, grades and 
          labeling requirements to international standards, 
          authorizes the addition of vitamin E to specified olive 
          oil, and permits a consumer to re-use a clean olive oil 
          container, can, or drum. 

          AB 2824 (Berryhill), Chapter 695, Statutes of 2008, 
          clarified the definitions of olive oil similar to SB 634 
          but was chaptered out by the provisions of SB 634. 

          SB 920 (Thompson), Chapter 543, Statutes of 1997, specifies 
          that olive oil labeled as California olive oil must be made 
          from California olives.  If the olive oil is labeled as 
          coming from a viticultural area, as specified in federal 
          law, 75 percent of the oil must be from olives grown in 
          that viticultural area.  Permits the blending of olive oil 
          if the contents and proportions of the blend are 
          prominently displayed on the label. 

          SB 1666 (Thompson), Chapter 530, Statutes of 1996, 
          establishes a working group of state and industry officials 
          to make recommendations to the Legislature concerning 







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          labeling standards for olive oil.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes


          CTW:kc  5/2/11   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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