`Spain's Farmers Call for a Clamp-Down on Olive Oil Price Abuses - Olive Oil Times
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Spain's Farmers Call for a Clamp-Down on Olive Oil Price Abuses

By Julie Butler
Mar. 3, 2011 10:26 UTC

A farmer’s group has called for sanc­tions against alleged abu­sive prac­tices in the highly con­cen­trated dis­tri­b­u­tion chan­nel of Spain’s olive oil indus­try.

The UPA, a pro­fes­sional body for small-scale farm­ers, claims that a form of ​“com­mer­cial ter­ror­ism” is tak­ing place. Ignacio Senovilla, the UPA’s agri­cul­ture sec­re­tary, says that among the unfair prac­tices are the con­tin­ued below cost retail sales of olive oil, the hold­ing of so-called blind auc­tions, and the gen­eral abuse of the dom­i­nant posi­tion held by dis­trib­u­tors.

The UPA wants Spain’s ​“ambigu­ous” retail trad­ing and com­pe­ti­tion laws changed to ensure the prac­tices are pros­e­cuted and pun­ished, and the imple­men­ta­tion of a code of con­duct to gov­ern olive oil sales. ​“The imple­men­ta­tion of these mea­sures will help estab­lish fair play rules for every­one, ensur­ing the future, strength and sta­bil­ity of the sec­tor,” Senovilla said.

In addi­tion, the UPA has called for resources to help increase the level of con­cen­tra­tion on the sup­ply side and seek new olive oil mar­kets. It says pro­ducer protests are immi­nent if the mea­sures are not pur­sued at the rel­e­vant regional, cen­tral and European gov­ern­ment lev­els.

“As for the inter­nal mar­ket, it is absolutely essen­tial and urgent to prop­erly value our olive oil, which is a very dif­fi­cult task given the dis­trib­u­tors’ sales poli­cies allow it to be used as a loss leader prod­uct which is con­stantly ​‘on spe­cial offer’,” Senovilla said.

The UPA recently held a press con­fer­ence to com­plain that a deal at super­mar­ket giant Lidl effec­tively saw EVOO sold at €1.57 per liter. At no time since January 2010 had pro­duc­ers’ prices even been that low, not even for lam­pante oil, let alone allow­ing for the cost of pack­ag­ing and trans­port, the farm­ers com­plained.

Senovilla renewed calls for the European Commission to update the ​“totally obso­lete” thresh­olds for acti­vat­ing pri­vate stor­age mea­sures as an interim mea­sure to prop up prices.



In January, Agriculture Commissioner Dacian Cioloş agreed to pro­vide pri­vate stor­age aid for the strug­gling EU pig­meat sec­tor but he has so far rejected calls to do so for olive oil.

Cioloş said last week that the bar­gain­ing clout of large-scale dis­trib­u­tors was at the root of Spain’s olive oil pric­ing prob­lems — not a mar­ket dis­tur­bance.

Also last week, EC sources said that not only were olive oil prices in Spain above the thresh­old, they had improved in the third week of February.

According to the EC, the price of EVOO rose 1.5 per­cent (with respect to the pre­vi­ous week), to €210.35 ($290.32) per 100kg, vir­gin olive oil was up 1.7 per­cent, to €199.38 ($275.18), and lam­pante 1.8%, to €186.31 ($257.14).

In Greece, the prices for EVOO and lam­pante oil are cur­rently low enough to qual­ify for the pri­vate stor­age mea­sures, the sources said. Cioloş says that for now he will con­tinue to mon­i­tor the mar­ket.

Meanwhile, Spain’s 2010-11 olive oil pro­duc­tion is already up 24 per­cent on last year’s total, and the sea­son isn’t quite over. According to Spain’s AAO (Olive Oil Agency), a total of 1.07 mil­lion tons had been pro­duced by the end of January. It said the above-aver­age har­vest had been aided by favor­able weather.

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