Arrest of CHO Group CEO Shocks Tunisian Olive Oil Sector

Summary

Abdelaziz Makhloufi, chief exec­u­tive of Tunisia’s largest olive oil exporter CHO Group, was arrested fol­low­ing an inves­ti­ga­tion into a pub­li­cally owned farm, lead­ing to the deten­tion of 15 oth­ers, includ­ing a for­mer min­is­ter of agri­cul­ture. Despite the dis­tur­bance, CHO Group remains com­mit­ted to con­tin­u­ing its oper­a­tions and antic­i­pates a strong crop yield for the upcom­ing sea­son, which is expected to drive olive oil prices in the inter­na­tional mar­ket.

Tunisia’s largest olive oil exporter said it was keep­ing busy with a bumper crop even while uncer­tainty around its chief exec­u­tive con­tin­ued.

Abdelaziz Makhloufi, the chief exec­u­tive of CHO Group, was arrested on October 30 fol­low­ing an ongo­ing inves­ti­ga­tion into a pub­li­cally owned farm in Tunisia’s Sfax gov­er­norate.

Another 15 peo­ple, includ­ing a for­mer min­is­ter of agri­cul­ture, have been detained by the author­i­ties. 

“To clar­ify, Mr. Makhloufi is being ques­tioned as part of a wide inves­ti­ga­tion into the man­age­ment of a pub­lic agri­cul­ture domain,” Wajih Rekik, CHO America’s chief exec­u­tive, told Olive Oil Times.

The arrest fol­lowed a sur­prise visit by Tunisian President Kaïs Saïed to the Henchir Chaâl farm, where he con­demned cor­rupt prac­tices, includ­ing the sale of agri­cul­tural machin­ery, such as trac­tors, at under­val­ued prices. 

Besides being home to 360,000 olive trees, the farm is also active in other agri­cul­tural activ­i­ties. 

The whole area cov­ers more than 5,000 hectares. The farm employs hun­dreds of per­ma­nent and sea­sonal work­ers. 

In a state­ment released to local media, CHO Group lawyers noted that Henchir Chaâl is the source of less than one per­cent of the group’s total olive pur­chases. 

The com­pany also spec­i­fied that CHO had never bought trac­tors from the farm. 

CHO Group said it remains com­mit­ted to con­tin­u­ing its oper­a­tions despite the dis­tur­bance.

“CHO America and all of CHO’s inter­na­tional oper­a­tions con­tinue their oper­a­tion and growth with all prod­ucts and brands,” Rekik said. ​“We want to reas­sure all part­ners that we are har­vest­ing, crush­ing, bot­tling, and ser­vic­ing our cus­tomers world­wide with the same pas­sion and ded­i­ca­tion.”

”Our whole group, farm­ers, millers, qual­ity assur­ance teams, logis­tics and inter­na­tional oper­a­tions around the world, have great admi­ra­tion for Mr. Makhloufi, who instilled in our DNA a cul­ture of pas­sion and hard work,” he added. ​“The reac­tion [to the arrest] was what you would expect from CHO: Millers and qual­ity assur­ance teams are work­ing week­ends and very long hours these days as we started the early har­vest of a bumper crop.”

The inves­ti­ga­tion sent shock­waves through Tunisia’s olive oil sec­tor, which sig­nif­i­cantly con­tributes to the coun­try’s econ­omy.

According to the National Observatory on Agriculture (Onagri), in the last ten months of the 2023/24 crop year, export rev­enues rose to approx­i­mately $1.5 (€1.44) bil­lion, a 61.7 per­cent increase com­pared to the same period of the pre­vi­ous sea­son. 

The rise was due to olive oil’s steep price increases in the last two years and to a 3.2 per­cent growth in total exports. 

These val­ues accounted for seven per­cent of the over­all Tunisia export rev­enues. CHO Group, widely known for its Terra Delyssa brand, exports to dozens of coun­tries. 

The Tunisian Minister of Agriculture Ezzedine Ben Cheikh fore­casted a pro­duc­tion of 340,000 met­ric tons of olive oil in the 2024/25 crop year. 

According to the Ministry of Agriculture, Water Resources and Fisheries, Tunisia pro­duced 220,000 tons in 2023/24.

“We are going through a great crop with the poten­tial to reach 350,000 tons,” Rekik said. ​“The rain we enjoyed in the last few weeks is strength­en­ing our plan­ta­tions for the next crop as well, and it is reliev­ing a big part of the anx­i­ety we had around the hydric stress.”

“CHO’s exports aver­age 55,000 tons and are pro­jected to pro­por­tion­ally increase this year with the higher yield we get from our orchards and higher demand from dif­fer­ent inter­na­tional mar­kets,” he added. 

The com­pany does not expect the ongo­ing inves­ti­ga­tion to impact olive oil prices. 

“Rain and con­sump­tion are what drive prices in the olive oil indus­try,” Rekik said.

As a lead­ing non‑E.U. olive oil pro­ducer, Tunisia’s olive oil pro­duc­tion this year is highly antic­i­pated by inter­na­tional mar­kets, espe­cially after two con­sec­u­tive sea­sons of under­whelm­ing yields across the Mediterranean basin.

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