Discounted Olive Oil Offers in Italy Spark Concerns Over Quality, Fair Pricing

Summary

Discounted extra vir­gin olive oil offers are preva­lent in Italian super­mar­kets, with prices as low as €4.99 per liter due to blends sourced from imported olive oil. These dis­counts have raised con­cerns among pro­duc­ers and asso­ci­a­tions about the impact on the olive oil mar­ket, with sim­i­lar issues also being inves­ti­gated in Spain regard­ing poten­tial price manip­u­la­tion and col­lu­sion among mar­ket oper­a­tors.

Hanging above the vine­gar and olive oil aisle in a super­mar­ket in cen­tral Italy, a large sign encour­ages con­sumers to buy extra-vir­gin olive oil at €4.99 per liter.

A bar­gain price, con­sid­er­ing that the aver­age price of Italian extra vir­gin olive oil at ori­gin has been fluc­tu­at­ing at dou­ble that cost in the last few weeks.

“It is a good price,” Alessandra Rossi, a mother of two, told Olive Oil Times while exam­in­ing the spe­cial dis­counted offer. ​“I won­der about qual­ity, though,” she added while look­ing at the label on the bot­tles: it indi­cates that the prod­uct does not come from Italian olive trees, as it is a blend sourced from imported extra vir­gin olive oil.

In a nearby super­mar­ket, another olive oil offer is pro­moted for the same sub­stan­tial dis­count: €4.99 per liter of extra vir­gin olive oil.

Some pal­lets and car­tons placed in the very cen­ter of the shop ensure that all incom­ing cus­tomers are well aware of the ongo­ing dis­count.

Offers such as those began appear­ing since March across the coun­try. Promoted as low-cost offers, such sales are con­sid­ered legal only when their spe­cial-price dura­tion is lim­ited to a hand­ful of days.

As Italian olive oil prices at ori­gin remain sta­ble on the country’s main mar­kets, large retail­ers pro­mote prod­ucts from lit­tle-known or pre­vi­ously unheard-of brands that carry Italian names.

Still, those extra vir­gin olive oils are mostly blends sourced through bulk olive oil imports from the Mediterranean Basin.

Spanish, Tunisian, and Turkish olive oil, whose quo­ta­tions are sig­nif­i­cantly lower on the main mar­kets, rep­re­sent the per­fect source of olive oil for retail­ers aim­ing to entice con­sumers with super-dis­counted extra vir­gin olive oil bot­tles.

In a coun­try with a sub­stan­tially stag­nant econ­omy and declin­ing olive oil pro­duc­tion vol­umes, super­mar­kets rely on well-estab­lished strate­gies.

The sig­nif­i­cant dis­tance between the Italian product’s price at ori­gin and the dis­counted prices reveals the chal­lenges Italian pro­duc­ers face in stay­ing on the mar­ket.

Italian farm­ers’ asso­ci­a­tions and other stake­hold­ers in the olive oil pro­duc­tion chain, such as the many olive oil mills spread through­out the coun­try, have protested for years against such dis­counts.

Italian grow­ers and olive oil millers say they can­not com­pete with those prices.

“Continuous pro­mo­tions, which we have crit­i­cized for a long time, have deval­ued the prod­uct, treat­ing it like any com­mod­ity and impact­ing the entire sup­ply chain, which is forced to oper­ate with­out fair com­pen­sa­tion, par­tic­u­larly in the agri­cul­tural sec­tor,” Andrea Carrassi, gen­eral direc­tor of the national pro­duc­ers asso­ci­a­tion Assitol, told Olive Oil Times in 2024.

Alberto Statti, pres­i­dent of the Calabrian branch of the farm­ers’ asso­ci­a­tion Confagricoltura, also under­lined the hid­den risk of such dis­counted offers in a 2020 inter­view: ​“Those offers make con­sumers believe that extra vir­gin olive oil comes cheap.”

A well-known study by Maria Lisa Clodoveo warned in 2020 that such dis­counts could open new space on the Italian mar­ket for lower-qual­ity olive oil blends.

“Selling off extra vir­gin olive oil means to con­demn olive groves to extinc­tion, because a cul­ture that does not pro­vide a fair income to the guardians of bio­di­ver­sity, the olive grow­ers, is a cul­ture with no social, eco­nomic or envi­ron­men­tal sus­tain­abil­ity,” Clodoveo said at the time.

In neigh­bor­ing Spain, the world’s largest olive oil-pro­duc­ing coun­try, farm­ers and con­sumer asso­ci­a­tions are urg­ing mar­ket author­i­ties to inves­ti­gate the cur­rent dynam­ics of olive oil prices.

In May, the Coordinator of Farmers and Ranchers Organizations (COAG), the national agri­cul­tural union, lodged a for­mal com­plaint with the National Commission of Markets and Competition (CNMC), Spain’s com­pe­ti­tion author­ity.

According to the com­plaint, the prices of olive oil in the mar­ket are being arti­fi­cially manip­u­lated, poten­tially vio­lat­ing Spain’s com­pe­ti­tion laws.

COAG’s com­plaint focuses on a sig­nif­i­cant dis­crep­ancy between the price paid to olive oil pro­duc­ers and the esti­mated fair mar­ket value.

According to COAG, a study con­ducted by the uni­ver­si­ties of Jaén and Córdoba, along with the Andalusian Institute of Agricultural and Fisheries Research and Training (IFAPA), shows that the aver­age price paid to pro­duc­ers is approx­i­mately €3.50 per kilo­gram. In con­trast, the fair mar­ket value is esti­mated at €5.55 per kilo­gram.

COAG noted that the €2 per kilo­gram gap could result in losses of up to €2.8 bil­lion for olive grow­ers dur­ing the cur­rent sea­son.

According to the agri­cul­tural union, the observed price dis­crep­an­cies are not jus­ti­fied by pro­duc­tion data or mar­ket con­di­tions, sug­gest­ing pos­si­ble col­lu­sion among mar­ket oper­a­tors to sup­press prices.

Should such prac­tices be con­firmed, they would vio­late cur­rent com­pe­ti­tion reg­u­la­tions.

COAG’s ini­tia­tive fol­lows pre­vi­ous con­cerns raised by con­sumer rights orga­ni­za­tion FACUA-Consumers in Action.

In April, FACUA accused six major super­mar­ket chains of engag­ing in a ​“non-aggres­sion pact” by uni­formly set­ting prices for their pri­vate-label extra vir­gin olive oil.

FACUA observed that after one of them reduced its price to €5.55 per liter, the other chains quickly matched this price, rais­ing sus­pi­cions of coor­di­nated pric­ing strate­gies.

Both orga­ni­za­tions are request­ing an imme­di­ate, com­pre­hen­sive inves­ti­ga­tion, which they believe is cru­cial to pro­tect the entire olive oil pro­duc­tion chain.

“Not every­one knows that pro­duc­ing extra vir­gin olive oils with rec­og­nized health-pro­mot­ing prop­er­ties is costly, and those who buy low-cost oil should be aware that they are sim­ply pur­chas­ing a lipid-based condi­ment mechan­i­cally extracted from a fruit, not a func­tional food capa­ble of act­ing as a dis­ease-pre­vent­ing agent,” Clodoveo wrote in her research in 2020.

“In fact, the rep­u­ta­tion of being a ​‘pow­er­ful healer’ or a ​‘nutri­tional fra­grance’ cur­rently applies to only a very small por­tion of the retail mar­ket, account­ing for roughly ten per­cent of the extra vir­gin olive oils avail­able,” she added.

In the mean­time, the dis­counted olive oils pile up in Rossi’s cart as she approaches the super­mar­ket cashier.

• Huffington Post