Greek Trade Group Proposes National Strategy for Olive Oil

Summary

The National Interbranch Olive Oil Association in Greece has devel­oped a national strat­egy to increase olive oil exports to 100,000 tons annu­ally, aim­ing to sta­bi­lize the indus­try and boost GDP. The strat­egy includes mea­sures to reduce costs, improve pro­duc­tion effi­ciency, develop new mar­kets, and imple­ment a parafis­cal tax to sup­port the sec­tor finan­cially.

The major orga­ni­za­tions of pro­duc­ers, exporters, and other olive oil pro­fes­sion­als in Greece, united under the com­mon roof of the National Interbranch Olive Oil Association, have devised a national strat­egy to cre­ate a sta­ble envi­ron­ment for the olive oil indus­try and, in the long term, increase the annual exports of Greek stan­dard­ized olive oil to 100,000 tons from about 40,000 tons cur­rently shipped abroad.

Olive oil is an extremely impor­tant prod­uct of the Greek agri­cul­tural sec­tor, being the main source of income for more than 500,000 fam­i­lies in the coun­try and adding more than 1 bil­lion euros to the annual GDP.

The strat­egy includes cer­tain mea­sures and pro­vi­sions tar­get­ing the pro­duc­tion chain.

An essen­tial step, accord­ing to the group, is to apply economies of scale to reduce costs at har­vest time, which are rel­a­tively high in Greece com­pared to other coun­tries due to the frag­men­ta­tion of the olive groves and of the pro­duc­tion process. This can be achieved by using finan­cial incen­tives like tax reduc­tions for pro­duc­ers to form asso­ci­a­tions, or by using the EU’s National Strategic Reference Framework (NSRF) to fund merg­ers and cre­ate clus­ters of pro­duc­ers and exporters.

Cost is also ampli­fied at the mills, where pro­duc­ers com­monly ask for their crops to be sep­a­rately processed. This means that more time and energy are required to process the olives and a change in the mind­set of pro­duc­ers is needed to accel­er­ate the pro­ce­dure.

It is fur­ther pro­posed that, by work­ing together with the state, a sim­pli­fied and mod­ern­ized leg­isla­tive frame­work for build­ing and oper­at­ing olive oil mills, bot­tling facil­i­ties, and refin­ery plants should be cre­ated. Moreover, an effec­tive way to man­age the waste pro­duced at the mills is cru­cial, along with pro­vi­sions for suc­cess­fully uti­liz­ing water resources by build­ing dams and irri­ga­tion sys­tems where needed.

In terms of pro­mot­ing and sell­ing olive oil, a re-eval­u­a­tion of all the Protected Destination of Origin (PDO) labels is pro­posed to iden­tify pos­si­ble weak­nesses and fur­ther strengthen the prod­uct. The strat­egy also finds that the inter­nal olive oil mar­ket is well-orga­nized, and new mar­kets abroad must be devel­oped aggres­sively.

It is remark­able though that dur­ing the eight years of reces­sion, the sec­tor man­aged to increase the exports of bot­tled olive oil to reach 40,000 tons per year from 15,000 tons before the finan­cial cri­sis emerged.

An impor­tant point of the strat­egy is a parafis­cal tax, sug­gested to be imposed on all pro­fes­sion­als in the olive oil sec­tor to ensure that ade­quate fund­ing is avail­able to sup­port the sec­tor and pro­mote the Greek olive oil.

This scheme has already been applied in Spain and lately in Tunisia, wherein the case of Spain it amounts to €6 per ton of olive oil, return­ing a total of more than €6 mil­lion a year to the orga­ni­za­tions and unions of olive oil to fund their actions.

According to experts of the sec­tor, the tax could be up to €1 or €2 per ton for every­body involved in the olive oil cycle like grow­ers, pro­duc­ers, mill own­ers, mer­chants, and exporters. This would mean that a total between €200,000 to €400,000 would be return­ing to the Interbranch Association every year as a finan­cial resource.

Apart from the pro­posed national strat­egy, the Association wants to vir­tu­ally reboot the olive oil sec­tor as its head, Manolis Giannoulis told the press. He deter­mined that their first pri­or­ity is to mon­i­tor and record the size and rel­e­vant quan­ti­ties of all the branches of the olive oil sec­tor.

“There is a com­plete lack of data in Greece on olive oil pro­duc­tion, sales, exports, reserves, and many more,” he said in his inter­view. ​“The Spaniards have data avail­able and they update them every month. By know­ing their next crop size, they have been able to estab­lish a stock mar­ket for olive oil and to sign con­tracts. We can do it here as well.”

Olive oil sold in bulk in the coun­try, usu­ally in 17-liter tins (called tenekes in Greece), is another big issue accord­ing to Giannoulis.

“Everyone is talk­ing about the olive oil sent to Italy in bulk, but nobody says any­thing about the bulk oil in tins sold inside of the coun­try,” he said.

“There is also the new man­date requir­ing that only bot­tled olive oil is served in restau­rants which is not ade­quately applied. Five years ago a research showed that 40 per­cent of the oil sold in tins was adul­ter­ated and 30 per­cent of it was not extra vir­gin even if it was sold as extra vir­gin.”

Estimates from most regions show that next season’s har­vest will be strong in Greece and, despite the inher­ent weak­nesses and imper­fec­tions of the sec­tor, the coop­er­a­tion of all stake­hold­ers can sig­nif­i­cantly improve the sta­tus of Greek olive oil.