Understand how the ‘oil mafia’ generates discord between public bodies in Brazil

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The sale of counterfeit olive oil has fueled divergences between different public bodies responsible for overseeing the product for some years. Criticism, however, escalated this final year.

The MPF-SP (Federal Ministry of São Paulo) intensified complaints against what it describes as inefficient measures of apprehension and suspension of the sale of oils in the country — such as the one carried out on December 17, in which more than 150,000 bottles of 24 brands were withdrawn from circulation.

According to the agency, the actions are palliative and ineffective in combating the actions of companies that adulterate, falsify and smuggle oil in Brazil. A Public Civil Action by the MPF-SP against Anvisa (National Health Surveillance Agency) and Mapa (Ministry of Agriculture, Livestock and Supply) has been in court since 2017 and requests measures to combat crimes, such as a ban on bulk imports and marketing of mixtures of olive oil with other oils.

According to the MPF, a Conduct Adjustment Agreement submitted at the end of August remains at a standstill. “There are more than four months, in practice, without an effective progress, supposedly, due to contingencies linked to the pandemic situation in the country”, says Karen Kahn, the prosecutor responsible for the action.

According to Kahn, the process demands agility due to the health risks posed by adulteration and counterfeiting of the product, which is part of the Brazilian diet and is frequently used in kitchens across the country. Each year, the country consumes around 70 million liters of oil, according to Embrapa. Brazil is the third largest importer, just behind the USA and the European Union. In the last two harvests, it imported an average of 97 thousand tons of the product.

News of seizures and suspensions of sales of adulterated or counterfeit oils have become recurrent in recent years. In 2012, importers already complained about inappropriate labeling and “gross fraud” by illegal competitors, such as using pomace oil or blending oils sold as olive oil.

Almost ten years later, importers heard by the report, who chose not to be identified, maintain the complaints, despite the authorities’ actions to inspect and remove counterfeiters’ products from supermarket shelves.

According to them, counterfeiting companies operate a “mafia” or illegal scheme that takes advantage of current legislation to re-offend in practice. Several of them appear recurrently in the lists of disapproved or apprehended brands and have their headquarters or location that is difficult to trace.

The Public Civil Action was proposed by the MPF in 2017 due to complaints filed since 2013 by Proteste (Brazilian Consumer Defense Association), an arm of the Euroconsumers group in Latin America. The Map operation against irregularities in the sector also took place.

The MPF’s Action pointed to the occurrence of crimes that continue until the present, according to Kahn, such as frauds to health legislation, trade and free competition, in addition to practices that violate the consumer’s right to correct information and that put their health at risk , it says.

The most common fraud in the manufacture of olive oil is the mixing of soy oil with artificial colors and flavors that simulate the original product, according to Mapa. In addition, there are also cases in which refined olive oil is marketed as extra virgin oil, which is considered to be purer.

In the last operation, the Ministry closed unregistered factories and plants dedicated to product adulteration and seized smuggled batches.

In the Public Civil Action, the MPF alleges that the post-import and marketing measures are ineffective and proposes to ban the entry of bulk oil to be bottled in the country, or its limitation to packages with a maximum capacity of up to five liters, a measure similar to already adopted in wines arriving in Brazil.

The proposal also suggests that the packages be sealed by the exporter, with no possibility of opening before the product reaches the consumer’s table.

“Currently, 90% of the oil consumed in the country is imported in large-volume gallons, for subsequent filling and manufacturing of a product with a national brand. This import enables and has generated, in a concrete way, the practice and continuity of numerous frauds”, says Kahn. “[O azeite] it completely loses its traceability, during storage, distribution and filling”.

According to the Ministry, the MPF’s assessment “mainly disregards that the problem does not stem solely from the import of raw materials for oil fraud, but rather from the orchestration of actions perpetrated by criminal organizations that act as clandestine companies in Brazil”, the Ministry stated in a note.

Another measure proposed by the MPF is the ban on the sale of compound or mixed oils. The measures are in place in regions like Europe, says Kahn. “This seal guarantees, in this way, the regulated and rigorous preservation of the original purity and identity of the olive oil”.

Sought by the report, Mapa and Anvisa stated that the adulteration of oils is “a historical fact and has a worldwide scope”. The bodies recognize the relevance of the problem, but contest several of the measures proposed in the Action, such as the ban on the sale of mixtures.

“It is a practice adopted in the Brazilian market and recognized in the legislation for years. It is an alternative to have more accessible products for the consumer. In addition, it is accepted in several countries”, informed the Agency.

Anvisa also defends that the modification of the regulation, by itself, would not curb fraud and crimes against the consumer. Since 2005, the agency has adopted a standard that requires manufacturers to disclose the percentage of olive oil used in commercialized mixtures.

In March, new measures were announced and should take effect from the same month of 2022. They establish sanitary requirements for vegetable oils and fats circulating in the country and also determine that the labels present clear information about the composition, with emphasis on the percentage of olive oil. The measure did not meet the request of the MP to establish a minimum percentage of oil in the combinations.

The Agency also assigns the Ministry the task of determining rules for the import of the product and states that “a double and overlapping action” on the part of both is not justified and would not contribute to reducing fraud. It also emphasizes that it acts in the control of products after their sale, based on suspicions of irregularity, and shares the responsibility for this inspection with the local Sanitary Surveillance, coordinated by the Agency.

An understanding between the three bodies on the issue seems distant. Before the Public Civil Action, an out-of-court settlement failed. “[Anvisa e Mapa] they contested the facts, it seems, by excluding the legal and regulatory responsibilities that would affect them or attributing them to each other”, says Kahn.

Map states that repressive actions against fraud, such as the one carried out on the 17th, “were not adopted in response to the aforementioned Public Civil Action, but because of MAPA’s conviction that this is a relevant issue and has deserved institutional attention, with such evolution of ostensive actions and with the improvement of normative tools”.

The Ministry also defends that crimes related to the product require coordinated action by the authorities. “Part of the combat actions goes beyond the competences of MAPA, and should include other bodies and instances, such as the police and others,” the Ministry told Folha.

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