The retail prices of popular Spanish olive oil brands Carbonell and Koipe have shot up this month by as much as one euro ($1.30) in some cases, as consumers start to feel the effects of the recent hike in wholesale prices.
Food giant Deoleo — which could soon become the world’s top olive oil producer if a rumored merger with Hojiblanca goes ahead — appears to be the first to pass on the rise and anxious eyes are now on consumers to see how they react.
Prices up by more than a third
The cost of a one liter bottle of Deoleo’s Carbonell brand refined olive oil is now nearly €4 in various stores in Barcelona. At the El Corte Inglés supermarket it sells for €3.99 — up more than a third on its €2.95 price at the end of last month — and, ironically, more than the higher quality Carbonell virgin olive oil, still at €3.05.
Koipe refined olive oil — also from the Deoleo stable — is up one euro to €3.85. A liter of popular sunflower oil Koipesol, meanwhile, is less than €2.
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The rises are not yet biting in all stores, all brands or in all olive oil grades, but the flow-on is considered inevitable and imminent.
In May, producer prices in Spain were at their lowest since 2009, with EVOO down to €1.77/kg. But with harsh weather expected to halve olive oil output this harvest, they have risen strongly since July and today’s EVOO bulk price from Spain’s pricing information system POOLred is the equivalent of nearly €2.60/kg.
Concerns Spanish olive oil consumption will fall
Many Spaniards associate Carbonell with the slogan “en casa de toda la vida” (“we’ve always used it at home”). But as Spanish olive oil producer Rafael Muela told Olive Oil Times, the issue now is just how loyal consumers will be.
Muela, co-owner and senior marketing vice-president of Córdoba-based Mueloliva, predicts that all retail prices for olive oil will go up in Spain within a few weeks.
“The big question is whether in a time of major financial crisis and unemployment Spanish consumers will be willing to pay about 35 percent more for a basic item in their shopping basket.”
“There was a similar situation here about seven years ago when the shelf price of extra virgin increased to almost €6/L. There was no financial crisis then and domestic olive oil consumption fell ten percent.”
Exports also at risk
“International olive oil distributors are also concerned about these high prices because they think that at this level consumption in Asia and South America is going to decrease so I think we’ll have a problem there in the future, maybe” Muela said.
Due to factors such as shipping times and existing warehouse stocks, he expects it will take about 3 – 4 months before retail prices also rise in the United States or United Kingdom.
Muela, who was himself spending today trying to decide on new prices, said his main worry now was how export markets would react to rises.
“If we penalize international sales it will be tough to increase them.”
Deoleo-Hojiblanca merger tipped
Meanwhile, Spanish news portal elEconomista.es reports that Hojiblanca, Spain’s biggest olive oil cooperative, is in talks to buy 30 percent of Deoleo, which is said to be seeking new investors for its next period of growth.
“If the deal goes through, and it seems like it will, Deoleo will grow and become the top oil producer in the world, surpassing titans in the ever-strong Italian oil industry,” it reports.
The possible merger is seen by some in Spain’s olive oil sector as likely to enhance Spain’s export push but others say the concentration in the extra virgin segment would be anti-competitive.