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Adding value to spanish exports


20 DE diciembre DE 2018

Table olives, Spain's seal of excellence

Ángel Marqués Ávila. Journalist

Table olives are an extraordinarily dynamic industry and very different from olive oil, to the extent that it seems like the only thing they have in common is the olives that serve as the raw materials. It's similar to the situation with table grapes and wine.

We know that almost any kind of olive can yield a good oil; however, the varieties that are suitable for table olives are more limited.

Obviously, table olives are not a basic product like milk or bread, but they are a very important part of the diet of large geographic areas and groups, such as those in the Mediterranean, Latino communities, and Arab people, and it's increasingly extending to other areas, like England, where people are already familiar with olives as an ingredient in pizza, salad and sandwiches, and they're increasingly eating them as a snack.

A global leader

All around the world, table olives are associated with Spain, and our industry is a global leader, according to Antonio de Mora, General Secretary of Asemesa (Association of Table Olive Exporters). Moreover, Spain has the greatest variety; the best quality, safety and hygiene; and the most advanced sector, which is a leader in production and exports. Spain is a global leader; however, the competition is increasing every single day.

The olive's role depends on each country's consumption habits. For Arab countries around the Mediterranean and eastern Mediterranean countries, the olive is an essential part of the diet, from breakfast to dinner. In Spain, in addition to being used often in cooking, they're also the quintessential tapa; in the US, they're used in martinis, but also in pizzas, salads and sandwiches; in Mexico they're used in several dishes; and in Russia they're always served with an aperitif and as an appetizer before lunch. Olives are also consumed in countless other countries.

Exports of black olives to the US decline

Exports of black olives from Spain to the US tumbled after the Trump Administration applied tariffs of 35%, according to data from the US Customs Department.

Black olive exports from Spain went from accounting for 50% of the total imported into the US to just 22%; they previously accounted for 30% of consumption, but that figure has slipped to just 10%.

According to Antonio de Mora, this issue is extremely controversial and important for the sector; as a result, Asemesa appealed the measure before the US courts and "it believes it is essential that the European Commission bring the case before the WTO as soon as possible. If it does not, the Commission will accept the findings of the US Department of Commerce against aid through the CAP, which would put all sectors at risk of being in a situation similar to that of black olives."

He added that, following a yearlong investigation in the US, black olives have been slapped with a 35% tariff, following the provisional 22% tariff. This has resulted in a 42% decline in exports between January and July, and almost 70% in August, which was the first month that the tariffs were officially applied. Asemesa is waiting for the European Union to speak out against the US before the World Trade Organization, just as Asemesa has done before the US courts. At any rate, this issue is going to take years to resolve and Asemesa hopes that all organizations truly do their part to help companies offset the losses they're already experiencing.

José Vázquez, who's responsible for table olives within ASAJA-Sevilla, weighed in on the issue with the US, saying, "We agree with Asemesa and we've also addressed the issue at Interaceituna. Accordingly, the ASAJA encourages the European Commission to report the tariff issue to the WTO which questions farm sector aid, and specifically aid for black table olives, which was approved by the WTO since it comes from the 'green box' and, therefore, is not linked to production. For example, if a farmer were to uproot his olive trees and plant wheat, aid would continue."

Moreover, "The resulting losses already account for a 70% decline in sales in August, and that figure will likely increase. We have asked that they mediate the issue of aid from the EU to the sector as a whole, as was the case when fruit and vegetables were banned from Russia. At the moment, only aid to promote these olives in the European Union has been mediated in the amount of 2 million euros."

The tariffs affect between around 360,000 tons of total exports.

Vázquez adds that this is a major problem, but fortunately we export to over 150 countries, and although the US is our main buyer after the EU, it's important not to exaggerate the issue. Nevertheless, we understand how easy it is for there to be collateral damage as some exporters, in addition to black olives, also export green olives and other products, which could also see a decline in exports to the US.

At the same time, calling into question aid approved by the WTO could be extended to other farm products that are also subject to that aid, which was arbitrated when we entered the EU and drove prices down to make international trade more viable.

According to Antonio Rodríguez, Head of Table Olives at COAG-Andalucía, following the decision by the International Trade Commission, confirmed on June 11th, the tariffs imposed by the Trade Department were 34.74% (of which 20% corresponded to anti-dumping duties and 14.57% to anti-subsidy duties). The EU must intervene because its Common Agricultural Policy (PAC) is being called into question even though the WTO recognizes and accepts that policy. As a result, we have asked the Commission to act diligently to defend this European product.

Rafael Sicilia, who's responsible for table olives within the UPA, tells us that the organization is against the tariffs as they're part of an arbitrary decision from the Trump Administration which has discriminately damaged the entire Andalusian table olive industry as well as farmers in the region.

According to Sicilia, Europe needs to defend Spanish producers as it's very unfair that table olive producers alone are being punished. He expressed these concerns to Minister Planas, Spain's Minister of Agriculture, Fisheries and Food (MAPAMA). The UPA is working with Interaceituna and other official organizations to promote their products in different countries and markets with a view to reducing losses resulting from Trump's tariffs and finding a place for all of the olives being produced, since it's difficult to compete with tariff-free table olives.

The Ministry trusts the EU

The Ministry is convinced that the European Union will appeal the decision by the US to impose tariffs on black table olives from Spain.

The Ministry also defends its efforts in this area underway by the European Commissioner for Agriculture and Rural Development, Phil Hogan.

As a result, the Spanish Ministry is optimistic and trusts that the EU will appeal the US measure before the WTO, as requested by those affected, especially by Asemesa.

Strengthening consumption

The truth is that, in recent years, olive consumption in Spain is slightly stagnant as it's a mature product that needs to reinvent itself. In view of this, our organization is completing a very ambitious study to understand the consumer situation better and seek out new ways to boost consumption. I believe innovation is essential for achieving this.

However, consumption around the world is on the rise, with an ongoing upward trend during the last 20 years due to the growing use of olives in certain recipes, such as pizza. There's also increasing demand for specialty olives which have specific preparation methods and different presentations and which are sold with more added value.

Olives are one of the most versatile products on the market and they can be eaten in countless recipes and formats. We could even say that there's an olive for every type of consumer: green, black, whole, pitted, cut, sliced, filled with anchovies, pepper, tuna, almonds, lemon, and there are even 100 different types of fillings. As a result, olives are wildly popular, but efforts must be made so that new generations continue to eat them.

As with most products, modern distribution plays a very important role: more than 60% is sold through this channel, while the remainder is sold through other types of establishments. In Spain, olives are sold by retailers and through HoReCa. It's worth noting that the bulk of Spain's olives are sold abroad, so this is primarily an exporting sector.

Broadly speaking, olive quality is high because it's a sector that's used to meeting considerable demand for quality in many countries around the world, although there are also certain channels, establishments and points-of-sale where quality can be improved.

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