Last week, the Commission said restaurants would be banned from serving oil to diners in refillable glass jugs or dipping bowls from next year. Instead, to protect consumers from fraud, restaurants would have to use sealed, non-refillable bottles that must be disposed of when empty.
The rules were criticised by the leaders of France and the Netherlands at an EU summit on Wednesday. British Prime Minister David Cameron, who wants to claw back powers from Brussels ahead of a potential referendum on the country's EU membership in 2017, accused the Commission of unnecessary interference.
"This is exactly the sort of area that the European Union needs to get right out of, in my view," Cameron said. "It shouldn't even be on the table, to make a false pun."
Agricultural Commissioner Dacian Cioloş said he had taken the decision once it became clear that consumers did not support the plans.
"This is crucial in my view, so I've decided to withdraw this proposal and not submit it for adoption," the commissioner said as he attempted to deflect a barrage of pointed questions.
"I wanted to come here today to demonstrate that I've been very alive to the current debate in the press."
Cioloş said he would propose revised rules to protect olive oil producers and consumers after further consultations with manufacturers, consumer groups and the restaurant industry, and promised to avoid any unnecessary red tape.
Europe's leading farm and agricultural cooperatives organisation, Copa-Cogeca, said in a statement the decision was a bad move for consumers and accused the Commission of bowing to political pressure.
“It is totally ludicrous that the Commission just withdraws this measure due to political pressure - it has been discussed for over a year and was supported by 15 member states and passed through all the correct legal procedures," said Pekka Pesonen, Copa-Coegca's secretary-general.
"It was really a very simple measure that was positive for everyone. It represented a positive first step in the implementation of the EU Commission's Action Plan to improve the viability, quality and competitiveness of the EU olive oil sector – a product which has many nutritional and health benefits.”
