Despite Tariff Exemption, Greek Producers Struggle to Export Their Oil

Summary

Greek olive oil has been exempted from U.S. tar­iffs on European Union imports, fol­low­ing lob­by­ing efforts by the Greek Minister of Agricultural Development and Food. This exemp­tion was granted due to Greece not being involved in the Airbus own­er­ship group, lead­ing to a favor­able out­come for Greek olive oil pro­duc­ers.

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.

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.

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.

“[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.

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.

“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.”

• Greek Reporter


• Politico