Australia’s Eucalyptus Industry Fights Fake Oil and Cheap Imports

Australian eucalyptus oil producers are upgrading domestic manufacturing infrastructure to compete with cheaper, lower-grade foreign imports that dominate the global market, according to industry operators and researchers.

Global Market Pressures and the Push for Australian Supply

Australia produces approximately five per cent of the world’s eucalyptus oil, according to industry data. While Australian distillers harvest the blue mallee (Eucalyptus polybractea) for its high-grade oil, competing nations like China primarily grow fast-growing blue gum (Eucalyptus globulus) for timber, harvesting the leaves as a secondary, more pungent oil source.

Cheaper imported oils frequently enter international markets and face risks of fraudulent substitution with camphor oil, according to local producers. To counter this price disparity, major Australian operators are investing heavily in processing technology. GR Davis recently spent more than $6 million on a new, ultra-efficient distillery and harvesting equipment at West Wyalong in south-central New South Wales, according to company representatives. Meanwhile, FGB Natural Products invested $10 million on a similar plant upgrade in central Victoria, where the blue mallee naturally thrives.

“China is the leading producer of eucalyptus oil in the world, so part of what we’re doing is futureproofing for Australian supply so we can make sure that as much oil as we can produce here is produced here and keep it a really local, sustainable industry,” said Tegan Abbott, managing director of FGB Natural Products.

Breeding Elite Blue Mallee Trees for Higher Yields

Domestic producers are pairing factory upgrades with agricultural research to increase output. The Davis family has planted five million elite trees across more than 7,000 hectares at West Wyalong, achieving a threefold increase in production and efficiency at their new distillery.

FGB Natural Products has planted a comparable number of trees near Wedderburn, Victoria. These plantations are the result of decades of genetic selection and propagation. Jason Goodger, a plant scientist from the University of Melbourne who worked with the Abbotts, noted that average wild blue mallee trees yield less than one per cent oil. “They calculated that they needed at least four per cent,” Dr Goodger said, noting that newer improved trees are yielding closer to seven per cent oil content.

Pandemic Demand and the Future of Domestic Production

Consumer habits shifted following the COVID-19 pandemic, generating a spike in local retail sales driven by heightened hygiene awareness, according to FGB Natural Products. Annabelle Davis noted that Australian-extracted oil supplies major international brands used in pharmaceutical, disinfectant, and confectionary items across more than 20 countries.

With modernized distilleries and high-yielding plantations reaching maturity, producers aim to secure a sustainable future for the historic local trade. “I think the business is well positioned for the next generation,” Annabelle Davis said.

Frequently Asked Questions

What makes blue mallee eucalyptus oil superior?

Blue mallee (Eucalyptus polybractea) yields a finer, higher-grade oil compared to the faster-growing blue gum species harvested primarily for timber in other countries.

How much of the world’s eucalyptus oil does Australia produce?

Australia accounts for approximately five per cent of global eucalyptus oil production, competing against major overseas suppliers like China.

Why are Australian producers investing in new distilleries?

Companies like GR Davis and FGB Natural Products are investing millions in efficient infrastructure and high-yield tree breeding to lower production costs and compete against cheaper, lower-grade imports.