`Olive Oil Could Help Greece Restart its Economy - Olive Oil Times

Olive Oil Could Help Greece Restart its Economy

Mar. 29, 2012
Costas Vasilopoulos

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A recent study under the title Greece 10 years ahead” aspires to set the foun­da­tions for the eco­nomic recov­ery of the tee­ter­ing coun­try.

The study, pro­duced by McKinsey man­age­ment con­sult­ing firm in Athens, pro­poses a National Growth Model’ that pri­or­i­tizes what has to be done and in which sec­tors of the econ­omy. Tourism and energy are con­sid­ered key sec­tors. Equally, agri­cul­ture is not a small cog in a large wheel but rather a big player that will yield sub­stan­tial income and cre­ate job posi­tions.

When the term agri­cul­ture’ is used in Greece, one thing cer­tainly comes in mind: olives and olive oil. Amongst other prod­ucts (toma­toes, feta cheese, peaches and saf­fron) that can be pro­moted and sold abroad in abun­dance, extra vir­gin olive oil already holds an excep­tional posi­tion as a top qual­ity prod­uct. The study states the well-known fact that 60 per­cent of the exported Greek olive oil is sold to Italy in bulk and not stan­dard­ized.

This imme­di­ately cre­ates a black hole’ in the oil mar­ket of the 50 per­cent markup of the final prod­uct. Bulk oil is sold for €2.1 per kilo to Italy and Italy sells its stan­dard­ized oil (which con­tains the Greek oil as well) for €3.1 per kilo. As a result, Greece does not cap­ture its fair share” in olive oil exports accord­ing to the study.

To reverse the sit­u­a­tion and be able to exploit all pos­si­bil­i­ties, the study defines four major strate­gic direc­tions. When it comes to olives and olive oil, the strate­gies to fol­low can be clearly artic­u­lated:


1. Identify the most impor­tant export mar­kets and give them pri­or­ity: Size, growth poten­tial and recep­tive­ness to prod­ucts from Greece should be the key fac­tors, in con­junc­tion with retailer pres­ence and eas­i­ness of com­mer­cial trans­ac­tions. For olive oil, the tar­get mar­kets could be Germany, Austria, Italy, Russia and North America.

2. Add value to exported olive oil and olives: Sell stan­dard­ized and branded olive oil, cre­ate a global cer­ti­fi­ca­tion mech­a­nism, pur­sue inno­va­tion. Instead of just putting the famous Kalamata olives in a jar, cre­ate vari­a­tions of the prod­uct, such as ready-to-eat, ready-to-cook, or con­ve­nience pack­ag­ing.

3. Increase exported quan­ti­ties and cut costs: Create 2 to 3 new pro­cess­ing and pack­ag­ing units of large scale, located close to raw mate­r­ial sup­plies to avoid trans­fer­ring costs.

4. Strengthen access to the tar­get mar­kets: Establish a mega com­pany via pub­lic – pri­vate part­ner­ship (PPP) to cope with the occur­ring prob­lems when try­ing to access the tar­get mar­kets and cre­ate and main­tain whole­saler and retailer net­works. The com­pany should be an umbrella orga­ni­za­tion for all agri­cul­ture prod­ucts.

It sounds like the promi­nent prod­ucts of Mother Earth can be the flag­ship of the recov­ery of Greece and it is a big oppor­tu­nity to over­come many anky­lo­sis of the past and make a big leap for­ward. According to the report, Greece should quickly put olive oil and olives along with other prod­ucts on the devel­op­ment chess­board and thus make all the dif­fer­ence.

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