BILL ANALYSIS Ó SB 411 Page 1 Date of Hearing: July 2, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 411 (Wolk) - As Amended: June 9, 2014 Policy Committee: AgricultureVote:7-0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill increases, from 75% to 85%, the content of olive oil that must be sourced from a specific American Viticultural Appellation (AVA) in order to be labelled as having been sourced from that AVA. FISCAL EFFECT Minor and absorbable costs to the Department of Public Health. COMMENTS 1) Purpose. According to the author, a 2012 study from the University of California Davis Olive Center reaffirmed the existence of fraud, mislabeling, and adulteration of extra virgin olive oil imported and sold in California. The author claims consumers are misled by deceiving and fraudulent labels, and as a result may pay premium prices for lower-quality olive oil. The author contends this bill will help assure consumers that they are getting the higher-quality olive oil for which they are paying. 2) 85% Content Standard. California adopted the current 75% content standard for olive oil using a specific AVA label in 1998. The recently-formed Olive Oil Commission of California requested the Department of Food and Agriculture hold a hearing on olive oil grade and labeling standards. Proposed new standards would affect olive oil producers of 5,000 gallons annually or more, and include a similar proposal to increase the content requirement olive oil that uses an AVA label from 75% to 85%. By contrast, this bill affects all SB 411 Page 2 California olive oil producers using an AVA label regardless of production volume. 3) Wine Standard for Olive Oil. The 85% content standard mirrors that which is commonly required for wine labelled with a specific AVA. The committee may wish to consider whether AVA labels and content standards are meaningful for olive oil, considering that those standards and regions were created for purposes of distinguishing between wines but not other agricultural products. Similarly, allowing olive oil or other agricultural products to use AVA labelling may lead to consumer confusion over the implied premium quality of those products and give AVA-sourced olive oil a competitive advantage over non-AVA sourced olive oil that is otherwise of comparable or superior quality. Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081