`Spanish Wholesalers: Don't Blame Us for the Olive Oil Crisis - Olive Oil Times

Spanish Wholesalers: Don't Blame Us for the Olive Oil Crisis

Mar. 14, 2011
Julie Butler

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Spain’s pow­er­ful food whole­salers have hit back at claims that they are caus­ing the coun­try’s olive oil price cri­sis.

Growers and pro­duc­ers blame these dis­tri­b­u­tion groups for allow­ing super­mar­kets to under-price olive oil as a con­sumer bait, under­min­ing its pres­tige and wors­en­ing the sec­tor’s already pre­car­i­ous sit­u­a­tion.

But in an arti­cle in the news­pa­per Diario de Sevilla, the dis­trib­u­tors say the price ten­sion is not their fault, though they do admit that olive oil – a sta­ple in Spanish kitchens – lends itself to price wars.

Retail experts say the aver­age shop­per does not look at the cost of every prod­uct they put in their trol­ley. They have an idea of the likely total at the check­out but only know indi­vid­ual prices for a few of their buys. In Spain, one such prod­uct is olive oil – con­sumers notice the price per liter.

It is there­fore unsur­pris­ing, reports local jour­nal­ist Tomás Monago, that olive oil is being widely used as a loss leader, espe­cially at a time of wan­ing con­sumer spend­ing.

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The National Association of Edible Oil Manufacturers, Packers and Refiners (Anierac) high­lights that such repeated sell­ing at a loss is pro­hib­ited in Spain. Anierac pres­i­dent Pedro Rubio said that set­ting aside the issue of loop­holes in this law, it was sim­ply com­mon sense that the price war could not con­tinue.

But asso­ci­a­tions rep­re­sent­ing the dis­tri­b­u­tion sec­tor (ACES, Asedas and Anged) flatly deny that they are the cul­prits.

Aurelio del Pino, direc­tor gen­eral of ACES (which cov­ers major super­mar­ket chains includ­ing Dia, Eroski and Lidl) said that it was easy to ver­ify this by exam­ing their accounts. He said no under-pric­ing claims made against the sec­tor had ever been sub­stan­ti­ated.

Another dis­tri­b­u­tion rep­re­sen­ta­tive said that the price squeeze had helped Spain absorb extremely high lev­els of domes­tic pro­duc­tion in recent years.

And Ignacio García Magarzo, direc­tor gen­eral of Asedas (a Spanish asso­ci­a­tion for dis­trib­u­tors and super­mar­kets), said that it was the con­sumers who were dri­ving down prices. What used to deter­mine prod­uct prices were not the prod­ucts them­selves but what the cus­tomer was will­ing to pay, and per­haps cus­tomers have moved to cheaper brands and found there’s lit­tle real dif­fer­ence.”

In recent weeks, and with the medi­a­tion of Spain’s Ministry of Environment, var­i­ous mem­bers of the indus­try have met to dis­cuss reforms includ­ing a code of con­duct and a con­tract approval sys­tem.

Jósé Vázquez, from the Asaja agri­cul­tural asso­ci­a­tion, says most pro­duc­ers are under-cap­i­tal­ized and aver­ag­ing a loss of €750 ($1043) for every 1500kg of olive oil they pro­duce.

March 18 has been set as a day of protests by grower, pro­ducer and coop­er­a­tive asso­ci­a­tions in their push for fairer prices and for the European Commission to imple­ment pri­vate ware­hous­ing pro­vi­sions.

Mr. del Pino said the best solu­tion to the the indus­try’s woes was dif­fer­en­ti­a­tion, which the dis­tri­b­u­tion sec­tor was already pur­su­ing. This would mean devel­op­ing a mar­ket like that for wine, where con­sumers val­ued qual­ity and were accus­tomed to a diver­sity of vari­ety and ori­gin.

A pro­ducer in Andalusia said he felt that grow­ing the export mar­ket was the main hope as Spanish con­sumers were not very dis­cern­ing. People know very lit­tle about the taste of dif­fer­ent vari­eties, such as Picual, Arbequina and Hojiblanca.”



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