Dcoop, Pompeian Under Fire for Deceptive Labeling

Spain’s largest olive oil coop­er­a­tive has come under fire for its ​“uneth­i­cal” export prac­tices for the sec­ond con­sec­u­tive month.

Dcoop has been accused of sell­ing blends of rape­seed oil and olive oil in the United States as extra vir­gin olive oil, under its Pompeian brand. According to the labels of its OlivExtra Original, the prod­uct is com­posed of rape­seed oil and ​“First Cold Press Extra Virgin Oil,” which is printed in larger and more promi­nent text.

While the nutri­tional infor­ma­tion pro­vided to North American dis­trib­u­tors indi­cates that 85 per­cent of the blend is rape­seed oil, sources close to the mat­ter have told media in Spain that less than one per­cent of the blend is actu­ally extra vir­gin olive oil. The remain­ing 99-plus per­cent, sources said, is Canadian rape­seed oil.

“Pompeian sells other sim­i­lar prod­ucts in the United States, in which it mixes rape­seed, grape seeds and extra vir­gin olive oil, always empha­siz­ing the image of olive oil as a com­mer­cial claim,” sources told El Español, the dig­i­tal news­pa­per that orig­i­nally broke the story.

These rev­e­la­tions come one month after the Spanish tax author­i­ties fined the coop­er­a­tive €2.81 mil­lion ($3.29 mil­lion) for fail­ing to pay import duties on Tunisian olive oil. Dcoop is cur­rently appeal­ing the fine. It was also revealed that the coop­er­a­tive was blend­ing this imported olive oil with its mem­bers’ oil before re-export­ing it to the United States labeled as Spanish extra vir­gin olive oil.

A num­ber of mem­bers of the coop­er­a­tive are now wary of Dcoop’s behav­ior and trade prac­tices with the United States, which they see as one of the most prof­itable mar­kets for their prod­uct. They worry that repeated abuses such as these will cause them to lose mar­ket share to other European Union and non-EU com­peti­tors.

“[A] good num­ber of Spanish oil coop­er­a­tives, some of them inte­grated in the con­tro­ver­sial Dcoop coop­er­a­tive, are becom­ing more uncom­fort­able because of Dcoop’s strat­egy to banal­ize the Spanish prod­uct in the U.S. mar­ket, which is one of the most prof­itable,” sources said. “[Dcoop is] sell­ing brands that have a min­i­mum pro­por­tion of the orig­i­nal Spanish olive oil.”

However, Rafael Sánchez de Puerta, the vice-pres­i­dent of Dcoop, has hit back at these reports say­ing they have been stoked by jeal­ous com­peti­tors who have so far failed to get their foot in the door of the lucra­tive U.S. mar­ket.

Dcoop cur­rently con­trols about 17 per­cent of the Spanish olive oil mar­ket in the U.S., with sales exceed­ing 30,000 tons last year. With these types of prac­tices, Dcoop also man­ages to keep its prices well below the rest of the mar­ket. Pompeian olive oil sells, on aver­age, at prices up to 40 per­cent lower than other Spanish and Italian brands and up to 100 per­cent lower than California olive oils.

Antonio Luque, the pres­i­dent of Dcoop, dou­bled down in defend­ing these low prices as well as deflect­ing the most recent crit­i­cism. He said that Dcoop was ded­i­cated to doing what is best for its mem­bers as well as Spanish extra vir­gin olive oil, as a whole.

However, Cristóbal Cano, the gen­eral sec­re­tary of the Union of Small Farmers and Cattle Ranchers (UPA) in Jaén, vehe­mently dis­agrees. He said that prac­tices such as these do a ​“dis­ser­vice” to all parts of the Spanish olive oil sec­tor work­ing to pro­mote its prod­ucts in the U.S.

“In our opin­ion, this is still a bad busi­ness prac­tice. We do not enter into the legal back­ground of the mat­ter, because it is per­mis­si­ble to mar­ket mix­tures in the American mar­ket, but it is true that we do not see some­thing praise­wor­thy or eth­i­cal to use the good name of olive oil, as can be seen on the label, when really the per­cent­age you have is min­i­mal,” Cano said. ​“It could be clas­si­fied as adver­tis­ing that invites con­fu­sion and even mis­lead­ing.”

Meanwhile, there is the con­cern in the indus­try that the debate played out pub­licly in head­lines through­out Spain and beyond will lead to more con­sumer mis­trust.

“Stop pos­si­ble dubi­ous prac­tices and stop open accu­sa­tions,” the Spanish Association of Olive Oil Municipalities (AEMO) warned on its Facebook page. ​“Because if they do not do so, there will come a time when that other part of the sec­tor, that strug­gles to com­mu­ni­cate to the world that extra vir­gin olive oil is unique, gas­tro­nomic and healthy…will also explode.”

https://www.facebook.com/municipiosdelolivo/posts/1825895134114497

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