Existing law requires the State Department of Public Health to enforce various laws regarding the manufacture, blending, production, and sale of olive oil. Existing law requires that olive oil produced, processed, sold, offered for sale, given away, or possessed in this state, that indicates on its label California Olive Oilor otherwise indicates that California is the source of the oil be made of oil derived solely from olives grown in California. Existing law requires any olive oil produced, processed, sold, offered for sale, given away, or possessed in this state, that indicates on its label that it is from an area that is one of the approved American Viticultural Areas under federal law, to be made of oil 75% of which is derived solely from olives grown in that approved American Viticultural Area. A violation of these provisions is a crime.

This bill would delete the provision regarding olive oil from American Viticultural Areas and, instead, require that olive oil labeled as coming from a specific region in California be made of oil at least 85% of which, by weight, is derived solely from olives grown in the specified region. The bill would also require that olive oil labeled as coming from a specific estate in California be made of oil at least 95% of which, by weight, is derived solely from olives grown on the specified estate. By creating new crimes, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law requires the State Department of Public Health to enforce various laws regarding the manufacture, blending, production, and sale of olive oil. Existing law requires that olive oil produced, processed, sold, offered for sale, given away, or possessed in this state, that indicates on its label California Olive Oilor otherwise indicates that California is the source of the oil be made of oil derived solely from olives grown in California. Existing law requires any olive oil produced, processed, sold, offered for sale, given away, or possessed in this state, that indicates on its label that it is from an area that is one of the approved American Viticultural Areas under federal law, to be made of oil 75% of which is derived solely from olives grown in that approved American Viticultural Area. A violation of these provisions is a crime.

This bill would delete the provision regarding olive oil from American Viticultural Areas and, instead, require that olive oil labeled as coming from a specific region in California be made of oil at least 85% of which, by weight, is derived solely from olives grown in the specified region. The bill would also require that olive oil labeled as coming from a specific estate in California be made of oil at least 95% of which, by weight, is derived solely from olives grown on the specified estate. By creating new crimes, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law establishes the Olive Oil Commission of California and the commissions board of directors. The board of directors, among other things, establishes an assessment to be paid by producers of olive oil and is authorized to recommend to the Secretary of Food and Agriculture the adoption and amendment of olive oil grades and labeling standards, as specified. For purposes of the commission, existing law defines a producer as a person who produces or causes to be produced olives that are processed into olive oil in the amount of 5,000 gallons or more during the marketing season.

Existing law also requires the State Department of Public Health to enforce various provisions of law regarding the manufacture, blending, production, and sale of olive oil.

This bill would exempt a producer under the Olive Oil Commission of California from these manufacturing, blending, production, and sale of olive oil provisions.

Date of Hearing: July 8, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

SBPCA Bill Id:SB 65

Author:(Wolk) – As Amended Ver:March 9, 2015

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill replaces American Viticultural Areas (AVAs) with specific California regions for olive oil labelled as having been sourced from a specific area; increases, from 75% to 85%, the content of the olive oil that must be sourced from that specific California region in order to be so labelled; and requires at least 95% of the content of the olive oil be sourced from a specific estate in order to use the term "estate" on the label.

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.

2) New 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 (OOCC) adopted new grade and labeling standards in 2014 that affect olive oil producers of 5,000 gallons annually or more, including the 85% regional content standard. The most recent OOCC report indicated there were 10 producers in the state that bottled above that threshold, accounting for 98% of all olive oil bottled in California. This bill requires non-OOCC olive oil producers to meet limited labeling requirements consistent with the OOCC standards, providing some uniformity to olive oil labels.

3) California Oleicultural Areas. The 85% content standard mirrors that which is commonly required for wine labelled with a specific AVA. Although this bill does not define the "specific regions" of California, or establish criteria for determining a specific region, this bill's approach is likely still superior to using AVAs, which may lead to consumer confusion over implied premium quality and give AVA-sourced olive oil a competitive advantage over non-AVA sourced olive oil that is otherwise of comparable or superior quality. The committee may wish to consider whether establishing criteria or a process for establishing labelling regions would further improve labelling transparency.

Analysis Prepared by: Joel Tashjian / APPR. / (916) 319-2081

Date of Hearing:

ASSEMBLY COMMITTEE ON AGRICULTURE

Henry Perea, Chair

SBPCA Bill Id:SB 65

Author:(Wolk) – As Amended Ver:March 9, 2015

SENATE VOTE: 36-0

SUBJECT: Food labeling: olive oil.

SUMMARY: Recasts, changes, and adds to requirements for labeling California olive oils. Specifically, this bill:

1. Recasts wording for California Olive Oil from "shall be made of oil derived solely" to "100 % of that oil shall be derived" from olives grown in California.

2. Deletes American Viticultural Areas (AVA) for labeling, replacing the AVAs with specific California regions; raises the required percentage of oil from 75% to at least 85% from the specified region; and, adds that the percentage is by weight.

3. Requires, for the use of the term estate in labeling olive oil, the oil is made from at least 95%, by weight, of oil derived from olives grown on the specified estate.

EXISTING LAW requires the California Department of Public Health (CDPH) to enforce various laws regarding the manufacture, blending, production, labeling and sale of olive oil. Existing law requires any olive oil produced, processed, sold, offered for sale, given away, or possessed in this state, that indicates on its label that it is from an area that is one of the approved AVAs under federal law, to be made of oil 75% of which is derived solely from olives grown in that approved AVA. A violation of these provisions is a misdemeanor, punishable by a fine of not less than $500, nor more than $1,000, or by imprisonment in the county jail for not exceeding one year, or by both fine and imprisonment.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS: The California Olive Oil Industry is going through a maturing process and trying to better define its products. Two years ago the industry created the Olive Oil Commission of California (OOCC) for the purpose of establishing quality grading, labeling standards, research, and enforcement requirements. The OOCC adopted "Grade and Labeling Standards" in September 2014 and made one amendment to them in February 2015. The OOCC membership is for bottlers of 5,000 gallons or more per year, upon which an assessment is paid. 2014 was the first year for the assessment and reporting; they received the gallons bottled reports from 65 bottlers of olive oil in California, for the olive oil bottled from August 2014 to March 2015. The reports showed 10 producers bottled above the OOCC threshold and accounted for 98% of all olive oil bottled in California.

The language of SB 65 includes some of the adopted labeling requirements OOCC has established for their membership but does not include all of the OOCC's adopted labeling requirements. OOCC requirements include prohibited labeling terminology, and requirements for the use of varietal names, among many other requirements. SB 65 will require the 55 non-OOCC bottlers in the state to meet a limited labeling requirement that would be consistent with the OOCC bottlers, thereby providing some uniformity for olive oil consumers.

Using specified regions as a labeling identifier may be an improvement over using wine label references of AVA, although neither the bill nor the OOCC standards provide any definition for how a region is determined. This could create an enforcement problem for CDPH and disputes among the bottlers attempting to gain a marketing edge. The Committee may wish to consider if "regions" need to be further defined.

When bottling fluids, such as in the wine industry, the Alcohol and Tobacco Tax and Trade Bureau uses the volume of fluids rather than their weight to measure the percentages. SB 65 is comparing the weight of the fluid rather than their volume, according to the author, due to the fact that the temperature of olive oil affects its volume.

Previous Legislation: SB 250 (Wolk), Chapter 344, Statutes of 2013, established the OOCC to engage in olive oil quality and nutritional research and to recommend grades and labeling standards; prescribed membership, board of directors, powers and duties, implementing and voting procedures, assessments and recordkeeping, penalties, and continuation or termination of OOCC; authorized OOCC to levy annual assessments on producers, as defined, and authorized OOCC to expand those funds for purposes of implementing the bill; and, becomes operative upon a favorable producer referendum vote.

SB 818 (Wolk), Chapter 567, Statures of 2011, redefined California’s olive oil labeling requirements, making technical yet substantive changes, to conform to United States labeling standards as outlined in the U.S. Standards for Grades of Olive Oil and Olive-Pomace oil, published in the Federal Register that took effect on October 25, 2010.

AB 1164 (Tran), Chapter 140, Statutes of 2009, made numerous technical changes in the California codes that were recommended by the Legislative Counsel’s Office.

AB 1585 (Accountability and Administrative Review), Chapter 7, Statutes of 2009, revised the procedure for mandatory and voluntary reporting requirements and deleted obsolete reports.

SB 634 (Wiggins), Chapter 694, Statutes of 2008, clarified the definition of olive oil, repealed current licensure provisions, conformed olive oil definitions, grades and labeling requirements to international standards, authorized the addition of vitamin E to specified olive oil, permitted a consumer to re-use a clean olive oil container, can, or drum; and, made legislative findings and declarations.

AB 2824 (Agriculture), Chapter 695, Statutes of 2008, clarified the definition of olive oil; conformed olive oil definitions, grades and labeling requirements to international standards; and, provided contingent enactment language with SB 634 (Wiggins).

AB 2079 (Emmerson), Chapter 73, Statutes of 2008, deemed food to be misbranded if the labeling does not conform to federal food allergen labeling requirements, and eliminated a licensing requirement for persons engaged in the manufacturing, packaging, and distribution of olive oil.

REGISTERED SUPPORT / OPPOSITION:

Support

Yocha Dehe Wintun Nation

Opposition

None on file

Analysis Prepared by: Jim Collin / AGRI. / (916) 319-2084

 CONSENT  

Bill No: SB 65

Author: Wolk (D)

Amended: 3/9/15

Vote: 21

SENATE AGRICULTURE COMMITTEE: 5-0, 4/7/15

AYES: Galgiani, Cannella, Berryhill, Pan, Wolk

SENATE HEALTH COMMITTEE: 8-0, 4/22/15

AYES: Hernandez, Nguyen, Mitchell, Monning, Nielsen, Pan, Roth, Wolk

NO VOTE RECORDED: Hall

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Food labeling: olive oil

SOURCE: Author

DIGEST: This bill removes the use of American Viticultural Areas from olive oil labels and instead uses specific regions or estates within California to indicate oil source. This bill requires that olive oil labeled as originating from a specific region of California contain at least 85% oil made from olives grown in that specified region, and if labeled from a specific estate, 95% from olives grown on the specified estate.

ANALYSIS: American Viticultural Areas (AVAs) were established in 1980 by the federal Alcohol and Tobacco Tax and Trade Bureau to delineate grape-growing regions in the United States based on differences in climate, geology, soil characteristics, and physical features such as topography or watersheds. In addition, wines may use an AVA label only if 75% of the wine is derived from grapes grown in that region. The first AVA established in California was Napa Valley in 1981, and today there are approximately 130 approved AVAs in California. (29 CFR Part 9).

Existing state law:

1. Requires the California Department of Public Health to regulate and enforce food labeling laws and regulations and may also determine that a food is misbranded if its label is false or misleading (Health and Safety Code §110660 et seq.).

2. Requires any olive oil produced, processed, sold, given away, or possessed in California to be derived solely from olives grown in California if the label indicates that it contains California olive oil. Similarly, olive oil with a label claim indicating a specific region of California (AVA, see below) must contain 75% olive oil made from olives grown in that specified region.

3. Creates the Olive Oil Commission of California (OOCC) to engage in olive oil quality and nutritional research and to recommend grading and labeling standards to the California Department of Food and Agriculture (CDFA). After a successful producer referendum, the OOCC developed California olive oil grading and labeling standards that would apply only to Californians processing over 5,000 gallons of olive oil, refined-olive oil, or olive-pomace oil, per year. CDFA approved these recommendations, and they became effective on September 26, 2014.

This bill:

1. Specifies that olive oil labeled “California Olive Oil” must be 100% derived from California-grown olives.

2. Deletes the use of AVAs for olive oil labeling.

3. Requires that olive oil labeled as originating from a specific region of California contain at least 85% of oil made from olives grown in that specified region.

4. Requires that olive oil labeled as originating from a specific estate in California contain at least 95% of oil made from olives grown on that specified estate.

Background

California Olive Oil. California produces 99% of the olives grown within the United States. According to the California Olive Oil Council, there are over 400 growers on approximately 30,000 acres dedicated to the production of olive oil. With over 75 olive varieties grown in California, it is estimated that the 2013-14 harvest will produce over 3.5 million gallons of extra virgin olive oil.

Comments

Conform state law. The OOCC recommendations approved by CDFA in 2014 included Section 11.3.4, which developed labeling requirements in regards to “provenance,” or origination of the olive oil. This bill conforms state law to these new regulations by removing the reference to AVAs and strengthens the standard of olive oil origination, requiring 100% of the olives to be grown in California, 85% within the stated region or 95% from the specific estate, if such provenance label claims are made. By amending existing law, these labeling requirements will apply to all California producers, not just those affected by OOCC standards.

Regions vs AVA. AVAs were created for the wine industry to group wines within a specific region (i.e. Napa Valley). Given the abundance of microclimates in California, which have an effect on product quality and taste, it is understandable that a different commodity, olive oil, would benefit from the creation of its own provenance areas based on variables affecting olive groves, not vineyards. However, the specific regions established in this bill are neither described nor detailed, and, therefore, require no delineation from one region to another. The OOCC may wish to address this issue in future recommendations.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 5/4/15)

None received

OPPOSITION: (Verified 5/4/15)

None received

ARGUMENTS IN SUPPORT: According to the author, “The California Health and Safety Code contains outdated language relating to utilizing California and its regions in the labeling of olive oil by referencing American Viticultural Areas (AVA’s) established by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) which regulates wine. SB 65 will replace the outdated language with language that incorporates the OOCC standards for ‘California’ labeling and applies it to all California olive oil producers.”

Prepared by: Anne Megaro / AGRI. / (916) 651-1508

5/6/15 16:16:13

**** END ****

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: SB 65

SUBJECT: Food labeling: olive oil

SUMMARY:

Revises olive oil labeling requirements by deleting language that requires labels referring to approved American Viticultural Areas (AVAs) be at least 75 percent from that AVA, and instead requiring olive oils labeled as coming from a specific region in California to be made from at least 85 percent of olives grown in that specific region. Also requires olive oils labeled as coming from a specific estate in California to be 95 percent from olives grown on that specified estate.

Existing law:

1. Requires any olive oil produced, processed, sold or possessed in California, that indicates on its label “California Olive Oil,” or uses words that indicate that California is the source of the oil, to be made of oil derived solely from olives grown in California.

2. Requires any olive oil produced, processed, sold or possessed in California that indicates on its label that is from one of the approved AVAs, as defined in federal regulations, to be made of oil of which at least 75 percent is derived solely from olives grown in that approved AVA.

This bill:

1. Deletes the requirement that at least 75 percent of olive oil that is labeled as coming from an approved AVA be derived from olives grown in that AVA, and instead requires 85 percent, by weight, of the olive oil that is labeled as coming from a specific region in California to be made from olives grown in the specified region.

2. Requires olive oil produced, processed, sold or possessed in California, that indicates on its label that it is from a specific estate in California, to be made of oil at least 95 percent of which, by weight, is derived from olives grown on the specified estate.

3. Makes other technical, clarifying changes to olive oil labeling requirements.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, California law contains outdated language relating to utilizing California and its regions in the labeling of olive oil by referencing AVAs established by the federal Alcohol and Tobacco Tax and Trade Bureau, which regulates wine. This bill will replace the outdated language with language that incorporates the Olive Oil Commission of California standards for ‘California’ labeling and applies it to all California olive oil producers.

2. Olive Oil Commission of California standards. SB 250 (Wolk), Chapter 344, Statutes of 2013, created the Olive Oil Commission of California (OOCC) to engage in olive oil quality and nutritional research and to recommend grading and labeling standards to the California Department of Food and Agriculture (CDFA). The OOCC developed California olive oil grading and labeling standards to apply only to those producing more than 5,000 gallons of olive oil, refined-olive oil, or olive-pomace oil, per year. In pertinent part, the regulations require: 100 percent of the oil to be from olives grown in the state of California; if reference is made to a specific region in California, then at least 85 percent of the oil (by weight) to be from olives grown in that region; and, if reference is made to a specific estate within California, then at least 95 percent of the oil (by weight) to be from olives grown on that estate. CDFA approved these recommendations, and they became effective on September 26, 2014.

3. Double referral. This bill was heard in the Senate Agriculture Committee on April 7, 2015, and passed with a 5-0 vote.

4. Prior legislation. SB 250 (Wolk), Chapter 344, Statutes of 2013, created an Olive Oil Commission of California to engage in olive oil quality and nutritional research and to recommend grades and labeling standards.

SB 411 (Wolk), of 2013, would have required any olive oil produced, processed, sold or possessed in California, that indicates on its label that it is from an area that is one of the approved American Viticultural Areas (AVAs) established pursuant to federal regulations, to be made of oil derived solely from olives grown in that approved AVA, rather than the existing law requirement that at least 75 percent of the oil be derived from olives grown in the AVA. SB 411 was approved by this committee, but was later amended in the Assembly to address a different subject matter.

SB 818 (Wolk), Chapter 567, Statutes of 2011, redefined California’s olive labeling requirements to conform to the United States labeling standards as outlined in the U.S. Standards for Grades of Olive Oil and Olive-Pomace Oil published in the Federal Register, as specified.

SB 634 (Wiggins), Chapter 694, Statutes of 2008, clarified the definition of olive oil, conformed olive oil definitions, grades, and labeling requirements to international standards, authorized the addition of vitamin E to specified olive oil, and permitted a consumer to re-use a clean olive oil container, can, or drum.

SB 920 (Thompson), Chapter 543, Statutes of 1997, specified that olive oil labeled as California olive oil must be made from California olives. SB 920 also required olive oil labeled as coming from an AVA to have at least 75 percent of the oil made from olives grown in that AVA.

SUPPORT AND OPPOSITION:

Support: None received.

Oppose: None received.

-- END --

SENATE COMMITTEE ON AGRICULTURE

Senator Cathleen Galgiani, Chair

2015 - 2016 Regular

Bill No: SB 65 Hearing Date: 4/7/15

Subject: Food labeling: olive oil

SUMMARY

:

This bill would remove the use of American Viticultural Areas from olive oil labels and instead use specific regions or estates within California to indicate oil source. This bill would require that olive oil labeled as originating from a specific region of California contain at least 85% oil made from olives grown in that specified region, and if labeled from a specific estate, 95% from olives grown on the specified estate.

BACKGROUND AND EXISTING LAW

:

Existing State Law:

The California Department of Public Health is responsible for regulating and enforcing food labeling laws and regulations and may determine that a food is misbranded if its label is false or misleading (Health and Safety Code §110660 et seq.).

Existing law requires any olive oil produced, processed, sold, given away, or possessed in California to be derived solely from olives grown in California if the label indicates that it contains California olive oil. Similarly, olive oil with a label claim indicating a specific region of California (American Viticultural Area, see below) must contain 75% olive oil made from olives grown in that specified region.

The Olive Oil Commission of California (OOCC) was created in 2013 to engage in olive oil quality and nutritional research and to recommend grading and labeling standards to the California Department of Food and Agriculture (CDFA). After a successful producer referendum, the OOCC developed California olive oil grading and labeling standards that would apply only to Californians processing over 5,000 gallons of olive oil, refined-olive oil, or olive-pomace oil, per year. CDFA approved these recommendations, and they became effective on September 26, 2014.

Existing Federal Law:

American Viticultural Areas (AVA) were established in 1980 by the federal Alcohol and Tobacco Tax and Trade Bureau to delineate grape-growing regions in the United States based on differences in climate, geology, soil characteristics, and physical features such as topography or watersheds. In addition, wines may use an AVA label only if 75% of the wine is derived from grapes grown in that region. The first AVA established in California was Napa Valley in 1981, and today there are approximately 130 approved AVAs in California. (29 CFR Part 9).

California Olive Oil:

California produces 99% of the olives grown within the United States. According to the California Olive Oil Council, there are over 400 growers on approximately 30,000 acres dedicated to the production of olive oil. With over 75 olive varieties grown in California, it is estimated that the 2013-14 harvest will produce over 3.5 million gallons of extra virgin olive oil.

PROPOSED LAW

:

This bill:

• Specifies that olive oil labeled “California Olive Oil” must be 100% derived from California-grown olives.

• Deletes the use of American Viticultural Areas for olive oil labeling.

• Requires that olive oil labeled as originating from a specific region of California contain at least 85% of oil made from olives grown in that specified region.

• Requires that olive oil labeled as originating from a specific estate in California contain at least 95% of oil made from olives grown on that specified estate.

ARGUMENTS IN SUPPORT:

According to the author, “The California Health and Safety Code contains outdated language relating to utilizing California and its regions in the labeling of olive oil by referencing American Viticultural Areas (AVA’s) established by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) which regulates wine. SB 65 will replace the outdated language with language that incorporates the OOCC standards for ‘California’ labeling and applies it to all California olive oil producers.”

ARGUMENTS IN OPPOSITION:

None received.

COMMENTS

:

Conform State Law: The OOCC recommendations approved by CDFA in 2014 included Section 11.3.4, which developed labeling requirements in regards to “provenance,” or origination of the olive oil. This bill would conform state law to these new regulations by removing the reference to American Viticultural Areas and strengthen the standard of olive oil origination, requiring 100% of the olives to be grown in California, 85% within the stated region or 95% from the specific estate, if such provenance label claims are made. By amending current law, these labeling requirements would apply to all California producers, not just those affected by OOCC standards.

Appellation vs AVA: American Viticultural Areas were created for the wine industry to group wines within a specific region (i.e. Napa Valley). Given the abundance of microclimates in California, which have an effect on product quality and taste, it is understandable that a different commodity, olive oil, would benefit from the creation of its own provenance areas based on variables affecting olive groves, not vineyards. However, the specific regions established in this bill are neither described nor detailed, and, therefore, require no delineation from one region to another. In contrast, wines that do not label under an AVA may choose to label with an appellation of origin, such as a state or county, as long as 75% of the grapes are grown in that appellation area. The committee may wish to consider whether including a reference to appellations or other region delineation would further the purpose of this bill and clarify “specified region.”

RELATED LEGISLATION

:

SB 411 (Wolk) of 2014. Would have required olive oil labeled with an approved AVA designation to be made of oil derived solely from olives grown in that AVA, instead of 75% from olives grown in the AVA.

SB 250 (Wolk), Chapter 344, Statutes of 2013. Creates the Olive Oil Commission of California to engage in olive oil quality and nutritional research and to recommend grades and labeling standards.

SB 818 (Wolk), Chapter 567, Statutes of 2011. Conforms California olive oil labeling requirements to United States labeling standards published in the U.S. Standards for Grade of Olive Oil and Olive-Pomace Oil.

SB 920 (Thompson), Chapter 543, Statutes of 1997. Requires that olive oil sold as “California Olive Oil” must be solely derived from California-grown olives and required olive oil with an AVA label to contain at least 75% of oil made from olives grown within the specified AVA.

SUPPORT

:

None received

OPPOSITION

:

None received

-- END --