Horsemeat got your goat? Try the sublime and scandalous world of olive oil...

Whilst everyone gets uppity about horsemeat, it's worth reflecting that burgers are not the first and won't be the last consumable to fall foul of food fraud. Olive oil's modern story is inseparable from the rise of the mafia...

by Tom Mueller
Last Updated: 09 Oct 2013

Olive oil naturally attracts crime. Even the Romans experienced a measure of it. Yet in preventing oil fraud, as in so many other areas of life, the Romans had a system. Many amphora fragments bear tituli picti, stamped inscriptions or handwritten notes in black or red ink that record information such as where the oil was produced, the weight and quality of the oil when the amphora was sealed, and the name of the merchant who imported it. Other annotations record the name of the imperial functionary who confirmed this information when the amphora was reopened at its destination in Rome.

The purpose of this vast bureaucratic apparatus and of the detailed, explicit labelling of each amphora was to ensure that none of the middlemen in the long supply chain linking the olive groves in Spain and Africa to the imperial oil warehouses in Rome siphoned off oil, or substituted an inferior product.

That fight continues in Italy today, although the methods and results are less impressive. The enormous popularity of the 'made in Italy' label worldwide makes it an appetising target for food fraudsters, who earn an estimated EUR60bn a year selling counterfeit or adulterated Italian foods. In some of these crimes, mafia syndicates and other criminal networks sell substandard or unsafe products at huge profits.

In the so-called Italburro scandal, for example, several dairies near Naples controlled by Italy's oldest crime organisation, the Camorra, blended fake butter from vegetable oils, lard, petrochemicals, and animal carcasses (some possibly infected with BSE, or mad cow disease) and sold 22,000 tons of their product throughout the EU.

Other cases involve 'legal frauds', which, although they seem unethical, are nevertheless permitted under Italian and EU law and are not mentioned on labels. Four 'Italian' products in 10 are actually relabelled foreign imports, often with false certificates of authenticity. Over a third of pasta manufactured in Italy is made from imported wheat, half of mozzarella is produced with German milk and curds, and two-thirds of prosciutto comes from foreign hogs.

Admittedly, the size and far-flung internationalisation of the food and agriculture sector, which has been estimated to be worth something like $5trn a year worldwide, make policing it very difficult. But the reasons food fraud is on the rise go well beyond size and globalism. Some frauds are committed by companies whose chemical knowledge and expertise far outstrip those of the investigators. The enormous profits associated with food allow unscrupulous businessmen to bribe often low-paid customs agents and law enforcers.

Traditional oil harvesting is hard graft

 

This is all the more true when the companies co-operating in the fraud are multinational concerns, which thanks to their deep pockets can influence legislators, pay for powerful advertising campaigns, and employ legal action to silence individuals and media questioning their practices. Ultimately, however, the central reason fraud is on the rise is that most governments lack the political will to confront it. In an age of laissez-faire economics and blind faith in the free market, companies are often given a free hand, even at the expense of consumers.

The Romans, who built, created and ran one of the largest and longest-lived international empires in history, largely through their immense pragmatism, even cynicism, knew this attitude and had a phrase for it: caveat emptor, 'let the buyer beware'. But their amphoras prove that the Romans sometimes took better care of the buyer than we do today: the labels told Roman consumers exactly what olive oil they were getting.

An Italian olive oil entrepreneur

Domenico Ribatti is a former olive oil tycoon who lives near Bari, in Puglia. By 1971, Domenico and his brothers were running a flourishing oil business, which, he says, sold about 75% of its product in bulk to major olive oil companies such as Bertolli, Sasso, Filippo Berio, and Carapelli, and the remainder to consumers under its own label. Three years later, Ribatti went into business for himself, founding a new company, Riolio. In the late 1950s, a number of vegetable oil refineries opened in Puglia, where lampante oil (the lowest grade of olive oil, which must be refined before being sold as food) was purified of its unpleasant tastes and odours. Ribatti bought a small refinery and rapidly expanded it into a production centre of 55,000sq m. By 1985, Ribatti was the world's foremost dealer in bulk olive oil.

According to Italian investigators, Ribatti's fall began on 10 August 1991, when a rusty tanker called Mazal II docked at the industrial port of Ordu in Turkey and pumped 2,200 tons of hazelnut oil into its hold. The ship then embarked on a meandering voyage through the Mediterranean and the North Sea. By 21 September, when Mazal II reached Barletta, a port in north-east Puglia, its cargo had become, on the ship's official documents, Greek olive oil.

It slipped through customs, possibly with the connivance of an official, was piped into tanker trucks and delivered to the refinery of Riolio, Ribatti's company. There it was sold, in some instances blended with real olive oil, to Riolio customers. Between August and November 1991, Mazal II and another tanker, Katerina T, delivered nearly 10,000 tons of Turkish hazelnut oil and Argentinian sunflower-seed oil to Riolio, all identified as Greek olive oil. Ribatti grew rich.

However, by early 1992 Ribatti and his associates were under investigation by the Guardia di Finanza, the finance ministry's military police force. During the next two years, working closely with agents of the European Union's antifraud office, they pieced together the details of Ribatti's crime. They identified Swiss bank accounts and Caribbean shell companies that Ribatti had used to buy the ersatz olive oil, and deciphered code names and aliases in company records.

The investigators discovered where Ribatti's adulterated oil had gone: to some of the largest producers of Italian olive oil, among them Nestle, Unilever, Bertolli, and Oleifici Fasanesi, which sold it to consumers as olive oil and collected the equivalent of about $12m in European subsidies intended to support the olive oil industry. (These companies claimed that they had been swindled by Ribatti and prosecutors were unable to prove complicity on their part.)

In March 1993, Domenico Ribatti was arrested, along with his chief chemist and three other accomplices, and charged with contraband, fraud against the European Union, operating a criminal network, and other crimes. In the end, Ribatti plea-bargained a 13-month prison term.

Leonardo Colavita, former president of Assitol, the olive oil trade association of which Domenico Ribatti was a leading member, and the owner of the Italian olive oil company Colavita, told me that the group's policy is to expel member companies that are accused of illegal activity. According to Colavita, when Ribatti resigned from the organisation, he said: 'If I leave, everybody's got to leave.' (No other company left Assitol at the time, however.) 'Mimmo Ribatti was a gentleman, because he didn't name names,' Colavita said. 'If he had named names, a lot of folks would have gone to jail.' He claims that many oil firms, including major Italian brands, knew that Ribatti was selling them adulterated oil (Colavita said his firm did not buy oil from Ribatti). 'They say they didn't, but they knew. If they didn't know, then they were incompetent - just as I knew, they had to know, too. And since they aren't incompetent, it means that they knew.'

AMERICA'S REAL-LIFE GODFATHER

In the 19th century, immigrants fled impoverished southern Italy for the New World, only to find that their new homeland lacked one of their most beloved foods. Some entered the olive oil trade to make good this deficit, and ended up turning a nice profit as oil importers.

Giuseppe Profaci (pictured right) was born in Villabate, Sicily in 1897, emigrated to the US in 1921, and eventually founded the Mamma Mia Importing Company in Brooklyn, New York. By the 1950s, the company was the leading olive oil importer in America and Joseph Profaci, as he now called himself, was known as the 'Olive Oil King'. But Profaci actually seems to have made most of his fortune in less savoury ways: drug trafficking, loan-sharking, extortion, prostitution and murder.

Joseph Profaci was a leader of La Cosa Nostra, and was described by Attorney General Robert Kennedy as 'one of the most powerful underworld figures in the United States'. (Mario Puzo, author of The Godfather, used Profaci as a model for Vito Corleone.) Profaci was one of many Italian-American mafiosi who used the olive oil import-export trade as a front for criminal activities.

One of his sons, John J Profaci, founded Colavita USA, the American subsidiary of the Italy-based olive oil company run by Leonardo Colavita, which makes one of the leading olive oil brands in the US. And John Profaci is still chairman emeritus of the company, which he runs together with his four sons. (Profaci points out that his father died over a decade before Colavita USA was formed and says there were never any links between the company and his father.)

Frauds and scams

Olive oil is one of the most frequently adulterated food products in the EU and the problem is particularly acute in Italy, the leading importer, consumer and exporter of olive oil and the hub of the world olive oil trade. (For the past 20 years, Spain has produced more oil than Italy, but much of it is shipped to Italy for packaging and is sold, legally, as Italian oil.)

Many olive oil scams involve straightforward mixing of low-grade vegetable oils, flavoured and coloured with plant extracts and sold in tins and bottles emblazoned with Italian flags or paintings of Mount Vesuvius, together with the folksy names of imaginary producers. More sophisticated scams, like Ribatti's, typically take place in high-tech laboratories, where cheaper oils of various kinds, made from olives but also from seeds and nuts, are processed and blended in ways that are extremely difficult to detect with chemical tests.

Olive harvesting is less hard graft when mechanical pickers are used in high-density groves of more than 700 trees per care in California, Spain and Portugal

One popular technique is 'mild deodorisation', by which cheap lampante oil is cleansed of its unpleasant tastes and odours by heat-treating it at 40 to 60 degrees Celsius. Deodorised oil, though unnaturally bland and devoid of the fruitiness required by law in extra virgin olive oil, is also largely free of defects, and lacks the telltale chemical signatures left by conventional refining.

Other large-scale frauds succeed thanks to the powerlessness, acquiescence, or even complicity of officials responsible for detecting oil crime. In April 2008, for example, investigators in Puglia confiscated nearly three million litres of olive oil from the Azienda Olearia Basile, which they say was falsely marked as organic, or as '100% Italian' when the company had actually imported it from North Africa. Among the suspects in the case was Tonino Zelinotti, head of the chemical analysis laboratory and taste panel of the Italian customs agency and a central figure in the creation of olive oil laws and authenticity tests in Rome and Brussels.

Prosecutors accused Zelinotti of wrongly certifying oil from Azienda Olearia Basile as extra virgin grade when it was in fact virgin or worse, and falsifying chemical analyses to throw off investigators. (Zelinotti died a short time later and is no longer a suspect in the case, which has not yet gone to trial.)

Complicity exists at the highest levels of the Italian administration. In 2007, an EU A six-century BC vase depicts Greeks harvesting olivesinvestigation determined that 95% of detected misappropriations of European agricultural subsidies, a large portion of which had occurred in the olive oil sector, had taken place in Italy. Brussels has charged Italy with negligence in recovering these funds, and is suing the Italian government for EUR311m in unrecovered subsidies.

Sometimes, in fact, the deck seems intentionally stacked against investigators in olive oil crime, who are hampered by bureaucratic delays, legal cavils, weak sanctions, and the fact that producers fined for infractions can postpone payment for years. Colonel De Filippi, the commander for the northern half of Italy of the NAS Carabinieri, an anti-adulteration group, acknowledged that some companies are essentially immune to investigation. 'Unfortunately, there are big producers who have strong political ties,' he said.

New world competitors

Where does the definition of 'extra virgin' come from? Who gets to decide? Throughout the new worlds of oil, such as Australia, South Africa and the US, these questions are being asked by producers who are starting to challenge the Mediterranean hegemony over oil. True, they only represent 2% of world olive oil production, but that share is growing, especially in the high-quality end of the market.

What's more, precisely because of their relative inexperience and small size, these newcomers are free from certain age-old prejudices and economic obligations that encumber the oil business around the Mediterranean, and they may be able to see the question of olive oil quality more clearly. They are everywhere, and form a rising chorus, each country and region with its own original and evolving history of oil, its own collection of the individualists and eccentrics who always seem to gravitate to olives.

But, potentially, the most important new world of oil is California. Today, the state produces fewer than 3,000 tons of oil a year, a sixth of Australia's output, and a 70th of the Puglia region. Yet California is the fifth-largest agricultural economy on earth and part of a nation of 300 million people, many of whom are just beginning to discover the joys of great olive oil. In 2009, the US overtook Greece as the third-largest olive oil consumer in the world, and the potential for further growth is enormous, considering that the average American eats only 0.9 litres of oil a year - half of Australian consumption and 4% of that of the Greeks.

If Americans learned to love oil even half as much as the Italians, the US market would far exceed Greece, Italy, and Spain - the world's three leading consumer nations - combined. 'Australia has helped set the new quality agenda, but there are only 23 million of us,' Paul Miller of the Australian Olive Association says. 'America, with 300 million strong, has a vital role to play in taking this agenda global, and making it stick.'

Extracted from Extra Virginity: The Sublime and Scandalous World of Olive Oil by Tom Mueller (Atlantic Books, £18.99)


CHOOSING GOOD OIL

  • Always buy oil labelled 'extra virgin'. Oils that have scored well in reputable contests are often a good choice

  • Find a shop where you can taste olive oils before you buy them. If you can't, choose a shop that performs stringent quality controls in its selection

  •  Prefer dark glass bottles or other containers that protect against light and buy a quantity you can use up quickly

  • Don't pay much attention to the colour of oil. Good oil comes in all shades

  • To ensure freshness, look for a 'best by' date that is two years away - the oil will be fresher

 

 

 


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