The European Commission proposed on Monday an action plan to help olive oil producers in eight countries including Spain, Greece and Italy overcome a sharp fall in prices.
European Union Agriculture Commissioner Dacian Ciolos discussed a plan to boost competition and improve brand image with the agriculture ministers from the eight nations in Luxembourg.
The sector has struggled with a fall in profitability due to a drop in prices, which have been dragged down by a surplus and other issues, the commission said.
The sector "has problems even though it has a strong consumption potential," Ciolos told reporters, adding that the commission tried in vain to help the sector by authorising government aid in three different occasions.
The EU executive also wants to tighten sanctions against fraud and cases of producers mixing different types of oil. A new way of classifying olive oil could be introduced as well.
Spain is the world's biggest olive oil producer, with a record 1.6 million tonnes forecast for the 2011-2012 harvest, compared with 400,000 tonnes in Italy and 300,000 tonnes in Greece.
Total European production is expected to rise by nine percent to 2.4 million tonnes.