Catalan Competition Authority Considers Investigation Into Price Manipulation

By Julie Butler

Oct. 10, 2013 15:58 UTC

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Growers’ claims that abusive behavior in the olive oil sector is driving down ex-mill prices may be investigated by Catalonia’s competition watchdog.

According to Catalan farmer group Unió de Pagesos, the Catalan Competition Authority (ACCO) agreed in Barcelona on Tuesday to probe its claims of anti-competitive conduct in the olive oil sector.

The union’s olive oil spokesman Miquel Blanch said it welcomed a commitment given by the ACCO to prepare a report into its concerns which would cover relations between different operators in the sector, prices, and any impediments to free competition.

Many olive oil producers in Catalonia are in a very difficult economic situation, particularly those in rain-fed areas with low yields, he said.

An ACCO spokeswoman said the authority had not yet received a formal request but had indicated its willingness to consider one and could not rule out preparing a report similar to the one it released on milk prices in January, titled “Prices in the Catalan dairy sector: are there risks to competition?”

Spain’s competition watchdog wants hard proof

Juan Luis Ávila Castro, general secretary of farmer union COAG in Jaén, said it would be “fantastic” if the ACCO prepared such a report on olive oil prices.

In May, the union made a submission to Spain’s National Competition Commission (CNC) for a probe of alleged price manipulation by olive oil distributors.

However, Ávila said that in the last week the CNC had replied that it required very concrete evidence to consider such a move.

He said the CNC had its own investigation unit and judicial powers and was best-placed to seek proof. The union could point out what was a very suspicious situation — producer prices falling despite Spain just experiencing its worst harvest in 20 years and having very low stocks.

Obtaining evidence was not easy, “we could be talking about telephone calls between four people.”

The union was considering other options, including asking the European Commission to investigate, he said.

“The situation has only gotten worse. Prices are dropping even though stocks are practically at zero and the next harvest will start later because the rain in May retarded the fruit set. Oil yields are much lower than they normally are at this time,” he said.

Low stocks and lower prices in Spain

Spain’s POOLred price observatory shows the average ex-mill price for olive oil for the week to October 10 was €2.15 a kilo, down from €2.69 in the last week of April and €2.86 at the end of January.

According to the Spanish Olive Oil Agency, Spain’s olive oil stocks stood at just under 400,000 tons at the end of August (its most recent published figure), a third lower than the average at the same time in the four previous seasons “but sufficient to supply the domestic and export market.”