Business

Despite Tariff Exemption, Greek Producers Struggle to Export Their Oil

With U.S. tariffs on some Spanish olive oil imports coming into force, Greek producers should have an advantage over Spain. However, the nation has not been able to profit from exporting its olive oil reserves.

Extra virgin olive oil being produced at a mill in Messinia
Oct. 28, 2019
By Ella Vincent
Extra virgin olive oil being produced at a mill in Messinia

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Greek olive oil has been exempted from the list of retal­ia­tory tar­iffs that was imposed by the United States on $7 bil­lion worth of European Union imports ear­lier this month.

This result comes after months of lob­by­ing by the Greek Minister of Agricultural Development and Food, Makis Voridis, to exempt Greek table olives and olive oil from the U.S. tariff list.

Most of the Greek pro­duc­ers want to do every­thing by themselves…but they do not have the quan­ti­ties to guar­an­tee long-term coop­er­a­tion with big mar­kets.- Kostas Liris, Greek agron­o­mist and olive oil expert

The tar­iffs stem from a dis­pute between the U.S. and E.U. about sub­si­dies for the European air­craft man­u­fac­turer Airbus. Voridis argued that since Greece was not a part of the Airbus own­er­ship group, the country’s olive oil should be exempt from U.S. tar­iffs.

The Office of the U.S. Trade Representative agreed and said Greek table olives and olive oil will not be on the list of items sub­ject to the increased import taxes.

See more: Olive Oil Trade News

Kostas Liris, a Greek agron­o­mist and olive oil expert, told Olive Oil Times that Greek olive oil pro­duc­ers can ben­e­fit from the tariff exemp­tion, espe­cially with U.S. tar­iffs on com­pet­ing Spanish oil.

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“[The] U.S. tariff exemp­tion could be a big oppor­tu­nity, espe­cially with the prob­lems that they will create for Spain,” Liris said. “Yes, it could make a dif­fer­ence if Greek pro­duc­ers are able to ben­e­fit from them.”

While Greek pro­duc­ers should have an advan­tage over those from Spain, the nation has not been able to profit off export­ing its olive oil reserves.

Greece is the third-largest pro­ducer of extra virgin olive oil, but pro­duces more than it sells. Most Greek olive oil is exported in bulk to Italy, which blends the oil with its own and sells it on the inter­na­tional market.

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According to the National Bank of Greece, only 27 per­cent of the country’s olive oil is exported explic­itly as Greek olive oil, so few Greek farm­ers directly ben­e­fit from the sale of the prod­uct.

Liris added that Greek olive oil is at a dis­ad­van­tage because of lower-priced com­pe­ti­tion from other nations.

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“It is impos­si­ble for Greek pro­duc­ers to trade, [espe­cially] with the prices at the moment and when they have to com­pete with Spanish and Tunisian bulk olive oil,” he said.

The Greek finan­cial crisis has also played a part in the export of olive oil not being as prof­itable as it should be for the nation’s pro­duc­ers. Due to the finan­cial crisis in 2009, Greek olive oil was sold to Italy at rock-bottom prices and this led to the dete­ri­o­ra­tion in Greek olive farmer coop­er­a­tives, accord­ing to Liris.

“Greek olive oil coop­er­a­tives do not exist any­more,” Liris said. “The most impor­tant ones have been bank­rupted over the last years. Only a few remain and all of them are very small. In the past [few] years, the most impor­tant ones have been sold or the banks have con­fis­cated their facil­i­ties.”

Many Greek olive farm­ers are reluc­tant to band together and often become inde­pen­dent pro­duc­ers as a result. Liris said that the lack of coop­er­a­tion among Greek olive oil farm­ers hurts the indus­try.

“Most of the Greek pro­duc­ers want to do every­thing by them­selves,” he said. “They do not like syn­er­gies. They try to sell and to export alone, some­times with excel­lent results, but they do not have the quan­ti­ties to guar­an­tee a long- term coop­er­a­tion with big mar­kets.”

While the Greek olive oil indus­try is in flux, Liris believes that with better prices, more con­sis­tent oil qual­ity, and greater coop­er­a­tion among pro­duc­ers, Greek olive oil farm­ers can thrive.

“Quality, con­sis­tency, quan­tity and cor­rect prices are the ele­ments that are nec­es­sary to pro­vide prof­its [to Greek olive oil farm­ers],” he said. “Greek pro­duc­ers have to under­stand that the need syn­er­gies in order to have a chance to get really big clients. Selling olive oil was never easy, but there is always a place in the market for every­one.”

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