`European Olive Oil Prices Rise 19.8 Percent in 2015 - Olive Oil Times

European Olive Oil Prices Rise 19.8 Percent in 2015

Feb. 9, 2016
Erin Ridley

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Across Western Europe, con­sumers have paid, on aver­age, 19.8 per­cent more for olive oil over the course of the first 11 months of 2015, accord­ing to a recent study of con­sumer goods sales by retail ana­lyst IRI. The price jump has cost con­sumers an esti­mated 231 mil­lion euros.

These ris­ing super­mar­ket prices are likely the result of a rough cou­ple of pro­duc­tion years for the European olive oil indus­try. According to the International Olive Council, Europe’s 2014/2015 sea­son saw low pro­duc­tion across the board, drop­ping from 2,482.6 met­ric tons in 2013/2014 to 1,433.5 met­ric tons in 2014/2015.

The cur­rent 2015/2016 sea­son hasn’t pro­vided the nec­es­sary recov­ery, either. Between bac­te­r­ial dis­ease in Italy, which has affected some one mil­lion trees, and less-than-opti­mal weather in Spain, European pro­duc­tion has just been aver­age.

Take Spain, the world’s largest olive oil pro­ducer, which was expected to pro­duce 1.2 mil­lion met­ric tons dur­ing the 2015/2016 sea­son, accord­ing to an offi­cial gov­ern­ment fore­cast. Having already com­pleted the major­ity of the har­vest (given warmer tem­per­a­tures and lack of rain), Spanish pro­duc­tion has only reached 867,700 mil­lion met­ric tons. Meanwhile, doubt lingers around the poten­tial of the har­vest to come.

Spain’s prices at ori­gin have reflected this uncer­tainty. During 2015, they reached as high as over €4 a kilo in August, drop­ping down grad­u­ally through­out the course of the har­vest (below €3) only to start climb­ing again in December and into the new year — and they haven’t stopped since. Currently, the far­m­gate price sits at roughly €3.50 euros per kilo.

IRI affirmed that retail price increases have been most notable in Spain, Italy and Greece — coun­tries where olive oil is one of the most pur­chased food items given its dom­i­nance in local gas­tron­omy.

Price increases have taken a toll on sales. According to IRI, the 2015 sales declines have been most pro­nounced in Greece and Spain, which saw drops of 18 per­cent and 16.2 per­cent, respec­tively, as com­pared to 2014.

Explains Anne Lefranc, IRI’s European Marketing Director, Olive oil which is a sta­ple prod­uct for Southern Europe coun­tries seems to have become a pre­mium’ item at least for the heavy con­sumer coun­tries.”

Her rec­om­men­da­tion for retail­ers and man­u­fac­tur­ers going for­ward: “[They] need to review their price, pro­mo­tion, assort­ment strat­egy so that they are clear on what impact price rises will have on total cat­e­gory and bas­ket sales.”

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