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Italy Growers Wary of Olive Oil Fraud as New Law Is Weighed Italy Growers Wary of Olive Oil Fraud as New Law Is Weighed
(about 20 hours later)
BLERA, Italy — For some of the 300 olive growers who toil here in the rolling hills of the Lazio region, making olive oil is a year-round labor of love. BLERA, Italy — For some of the 300 olive growers who toil here in the rolling hills of the Lazio region, making olive oil is a year-round labor of love.
The olives are hand-harvested early in the fall, when they are still green, and are whisked to a cooperative-run mill so they can be cold-pressed within 12 hours.The olives are hand-harvested early in the fall, when they are still green, and are whisked to a cooperative-run mill so they can be cold-pressed within 12 hours.
Nothing is added in the process, following precise standards that produce the extra-virgin olive oil that Italy vaunts as one of its most prized products, and most successful global exports.Nothing is added in the process, following precise standards that produce the extra-virgin olive oil that Italy vaunts as one of its most prized products, and most successful global exports.
“We want people to buy the oil because it is a Colli Etruschi oil,” which is famed for its quality, said Nicola Fazzi, the director of the Colli Etruschi cooperative, founded in 1965.“We want people to buy the oil because it is a Colli Etruschi oil,” which is famed for its quality, said Nicola Fazzi, the director of the Colli Etruschi cooperative, founded in 1965.
That is why Mr. Fazzi, like producers elsewhere in Italy, is troubled by a draft legislative decree under review in Parliament — with a decision expected on Tuesday — that would tinker with the penalties for passing off counterfeit olive oil and its origin.That is why Mr. Fazzi, like producers elsewhere in Italy, is troubled by a draft legislative decree under review in Parliament — with a decision expected on Tuesday — that would tinker with the penalties for passing off counterfeit olive oil and its origin.
If the decree passes, critics say, commercial fraud and counterfeiting would no longer be considered a criminal offense. Instead, it would be punished by a relatively light fine, effectively incentivizing the wrongdoing, the producers say.If the decree passes, critics say, commercial fraud and counterfeiting would no longer be considered a criminal offense. Instead, it would be punished by a relatively light fine, effectively incentivizing the wrongdoing, the producers say.
“Much is said about promoting ‘made in Italy,’ but then they try to decriminalize adulterated oil,” Mr. Fazzi lamented, joining a chorus of critics, including trade associations and farm lobbies, who fear for the reputation of Italian extra-virgin olive oil if the decree passes. “Much is said about promoting ‘made in Italy,’ but then they try to decriminalize adulterated oil,” Mr. Fazzi lamented, joining a chorus of critics, including trade associations and farm lobbies, that fear for the reputation of Italian extra-virgin olive oil if the decree passes.
But like so many things in Italy, the truth of the matter is as murky as just-pressed olive oil itself, while the controversy is sizzling.But like so many things in Italy, the truth of the matter is as murky as just-pressed olive oil itself, while the controversy is sizzling.
The government insists that the draft decree has been misinterpreted by its critics and that it actually toughens existing sanctions, without decriminalizing false labeling and indication of origin.The government insists that the draft decree has been misinterpreted by its critics and that it actually toughens existing sanctions, without decriminalizing false labeling and indication of origin.
On the other hand, those who follow the sector closely say that, at a minimum, the decree would favor industrial-scale producers over smaller cooperatives like Mr. Fazzi’s by removing disincentive to large-scale fraud.On the other hand, those who follow the sector closely say that, at a minimum, the decree would favor industrial-scale producers over smaller cooperatives like Mr. Fazzi’s by removing disincentive to large-scale fraud.
That may leave growers, producers and, yes, consumers confused. “Like all juridical questions, it’s just difficult to understand,” conceded Stefano Vaccari, who heads the Agriculture Ministry’s antifraud unit.That may leave growers, producers and, yes, consumers confused. “Like all juridical questions, it’s just difficult to understand,” conceded Stefano Vaccari, who heads the Agriculture Ministry’s antifraud unit.
Yet he and other officials insisted that the decree in fact reinforces punishment of “Italian-sounding” products — those misleadingly labeled as being of Italian provenance, but actually produced elsewhere — which each year amount to about 60 billion euros, or $66.13 billion, in missed earnings for Italy.Yet he and other officials insisted that the decree in fact reinforces punishment of “Italian-sounding” products — those misleadingly labeled as being of Italian provenance, but actually produced elsewhere — which each year amount to about 60 billion euros, or $66.13 billion, in missed earnings for Italy.
“If a label is evocative of Italy, but the oil is not Italian, I can slap on a fine,” Mr. Vaccari said. “It’s another step forward, not a decriminalization.”“If a label is evocative of Italy, but the oil is not Italian, I can slap on a fine,” Mr. Vaccari said. “It’s another step forward, not a decriminalization.”
One of the few things clear about the proposed measure is that the controversy has everything to do with the laws of supply and demand, and with differing strategies for filling the seemingly bottomless global appetite for Italian foodstuffs.One of the few things clear about the proposed measure is that the controversy has everything to do with the laws of supply and demand, and with differing strategies for filling the seemingly bottomless global appetite for Italian foodstuffs.
The pressure to meet that demand significantly increased in 2014, when olive fruit flies and olive tree disease halved olive oil production in Italy.The pressure to meet that demand significantly increased in 2014, when olive fruit flies and olive tree disease halved olive oil production in Italy.
The troubles fueled record imports — 666,000 tons of olive oil and pomace, a 38 percent increase over the previous year — which Italy’s largest farming lobby, Coldiretti, said “certainly encouraged fraud,” or the temptation to blend domestic and imported oils without proper labeling. Olive oil fraud quadrupled in 2015, the lobby said on Friday.The troubles fueled record imports — 666,000 tons of olive oil and pomace, a 38 percent increase over the previous year — which Italy’s largest farming lobby, Coldiretti, said “certainly encouraged fraud,” or the temptation to blend domestic and imported oils without proper labeling. Olive oil fraud quadrupled in 2015, the lobby said on Friday.
Blended olive oils are fine, as long as consumers are aware of what they are getting. But the real money is in extra-virgin olive oil, whose cost usually starts at €10 a liter (about $11), or twice the cost of blended oils.Blended olive oils are fine, as long as consumers are aware of what they are getting. But the real money is in extra-virgin olive oil, whose cost usually starts at €10 a liter (about $11), or twice the cost of blended oils.
Fraud occurs when companies attempt to pass off foreign olive oil as 100 percent Italian.Fraud occurs when companies attempt to pass off foreign olive oil as 100 percent Italian.
“There are two sectors in conflict because there is a different vision between ‘made in Italy,’ which means using Italian olives, and ‘product of Italy,’ which means olives from around the world blended with Italian know-how,” said Alberto Grimelli, an agronomist who is the editor of the specialist website “Teatro Naturale.”“There are two sectors in conflict because there is a different vision between ‘made in Italy,’ which means using Italian olives, and ‘product of Italy,’ which means olives from around the world blended with Italian know-how,” said Alberto Grimelli, an agronomist who is the editor of the specialist website “Teatro Naturale.”
Mr. Grimelli, who opposes the measure before Parliament, said that by promoting sanctions over criminal investigations, the legislative decree minimizes “the damage done to the olive oil industry,” whose image is sullied when cases of fraud emerge.Mr. Grimelli, who opposes the measure before Parliament, said that by promoting sanctions over criminal investigations, the legislative decree minimizes “the damage done to the olive oil industry,” whose image is sullied when cases of fraud emerge.
Unless prosecutors can investigate with judicial instruments, like warrants and wiretaps — and not mere fines — widespread counterfeiting and fraud will go unchecked, he said.Unless prosecutors can investigate with judicial instruments, like warrants and wiretaps — and not mere fines — widespread counterfeiting and fraud will go unchecked, he said.
Others agreed. If the decree passes, “the whole notion of ‘made in Italy’ is at risk,” said Tom Mueller, an American journalist based in Liguria who has written extensively about olive oil fraud.Others agreed. If the decree passes, “the whole notion of ‘made in Italy’ is at risk,” said Tom Mueller, an American journalist based in Liguria who has written extensively about olive oil fraud.
In particular, the decree benefits industrial olive oil bottlers, as the light fines legitimize the notion of “product of Italy” over “made in Italy,” he said, “opening the floodgates so that the generic product of Italy becomes the new normal.”In particular, the decree benefits industrial olive oil bottlers, as the light fines legitimize the notion of “product of Italy” over “made in Italy,” he said, “opening the floodgates so that the generic product of Italy becomes the new normal.”
“If it works for olive oil, it will work for other products, too,” he predicted. “Indication of any geographic provenance is bad for big business,” Mr. Mueller explained.“If it works for olive oil, it will work for other products, too,” he predicted. “Indication of any geographic provenance is bad for big business,” Mr. Mueller explained.
The decree “is ultimately a shield for dishonesty, and that could become the way of the future,” he said. “It’s free trade über alles, not protecting the quality of foods made from the soil.”The decree “is ultimately a shield for dishonesty, and that could become the way of the future,” he said. “It’s free trade über alles, not protecting the quality of foods made from the soil.”
As it is, Italy has a very good law, the Mongiello “Save Oil” law, passed three years ago, that vastly broadened the powers of investigators to root out olive oil fraud and prosecute wrongdoers with stiff penalties.As it is, Italy has a very good law, the Mongiello “Save Oil” law, passed three years ago, that vastly broadened the powers of investigators to root out olive oil fraud and prosecute wrongdoers with stiff penalties.
Moreover, producers have to enroll in a national registry that closely monitors both production and olive oil sales.Moreover, producers have to enroll in a national registry that closely monitors both production and olive oil sales.
“The law is bearing fruit because the measures have been used by prosecutors in Trani, Bari, Siena and Turin” to stem multimillion euro counterfeiting, said Colomba Mongiello, the lower house lawmaker who sponsored the 2013 law, referring to several recent investigations.“The law is bearing fruit because the measures have been used by prosecutors in Trani, Bari, Siena and Turin” to stem multimillion euro counterfeiting, said Colomba Mongiello, the lower house lawmaker who sponsored the 2013 law, referring to several recent investigations.
In November, seven well-known olive oil companies were investigated for passing off second-tier olive oil as extra virgin, at a considerable markup, misleading customers.In November, seven well-known olive oil companies were investigated for passing off second-tier olive oil as extra virgin, at a considerable markup, misleading customers.
Likewise, in December, investigators uncovered what they said was a massive fraud involving about 7,000 tons of olive oil, which included oil from North Africa and elsewhere but was marketed as 100 percent Italian.Likewise, in December, investigators uncovered what they said was a massive fraud involving about 7,000 tons of olive oil, which included oil from North Africa and elsewhere but was marketed as 100 percent Italian.
Fifteen people are under investigation for a variety of charges, including commercial fraud and false labeling. “These show that the system introduced by the law works,” Ms. Mongiello said. “We have to promote a ‘made in Italy’ that defends honest producers.”Fifteen people are under investigation for a variety of charges, including commercial fraud and false labeling. “These show that the system introduced by the law works,” Ms. Mongiello said. “We have to promote a ‘made in Italy’ that defends honest producers.”
But the legislative decree, if passed as is, would effectively leapfrog the Mongiello law, substituting fines for criminal prosecution.But the legislative decree, if passed as is, would effectively leapfrog the Mongiello law, substituting fines for criminal prosecution.
Law enforcement officials who monitor fraud are fearing for the worst because according to a principle set forth by the European Court of Human Rights, a company cannot be tried in both criminal and administrative courts for the same offense.Law enforcement officials who monitor fraud are fearing for the worst because according to a principle set forth by the European Court of Human Rights, a company cannot be tried in both criminal and administrative courts for the same offense.
Gian Carlo Caselli, a former anti-mafia prosecutor, leads a Justice Ministry commission that is drafting a broad reform on food and agricultural-related crimes. In his view, the draft legislative decree “greatly reduces the lines of defense” against counterfeiting.Gian Carlo Caselli, a former anti-mafia prosecutor, leads a Justice Ministry commission that is drafting a broad reform on food and agricultural-related crimes. In his view, the draft legislative decree “greatly reduces the lines of defense” against counterfeiting.
As an example of the stakes, David Granieri, the president of Italy’s olive oil producers consortium Unaprol, cited the recent case of an olive oil scam in Puglia — an operation code-named “Mamma Mia.”As an example of the stakes, David Granieri, the president of Italy’s olive oil producers consortium Unaprol, cited the recent case of an olive oil scam in Puglia — an operation code-named “Mamma Mia.”
It involved the sale of more than 2,000 tons of Spanish and Greek olive oil, falsely labeled Italian. Eight people are under investigation for the fraud, which accounted for an estimated value of €13 million in potential sales.It involved the sale of more than 2,000 tons of Spanish and Greek olive oil, falsely labeled Italian. Eight people are under investigation for the fraud, which accounted for an estimated value of €13 million in potential sales.
“Imagine that a €13 million fraud could be sanctioned by paying a €9,500 fine,” instead of facing a criminal investigation, Mr. Granieri exclaimed indignantly.“Imagine that a €13 million fraud could be sanctioned by paying a €9,500 fine,” instead of facing a criminal investigation, Mr. Granieri exclaimed indignantly.
As a remedy, his group and others have been pushing for labeling that would trace a food product from the soil to the table, something industrial producers generally oppose.As a remedy, his group and others have been pushing for labeling that would trace a food product from the soil to the table, something industrial producers generally oppose.
Ms. Mongiello, who sits on the agriculture commission, promised, “We will intervene on this text because there can be no doubt.”Ms. Mongiello, who sits on the agriculture commission, promised, “We will intervene on this text because there can be no doubt.”
“We want to assure the many honest producers that work to create quality products and protect consumers, who have a right to be informed about the product they are buying,” and can be certain they are buying the real thing, she said.“We want to assure the many honest producers that work to create quality products and protect consumers, who have a right to be informed about the product they are buying,” and can be certain they are buying the real thing, she said.