BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 818| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED SB 818 Page 2 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 SB 818 Page 3 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. SB 818 Page 4 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 SB 818 Page 5 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 SB 818 Page 6 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 **** END ****