Supermarkets in Spain Poised to Clash Over Olive Oil Prices

Summary

Spanish olive oil pro­duc­ers and super­mar­kets are poten­tially enter­ing a price war, as major brand Coosur began sell­ing directly to cus­tomers at lower prices in mid-February. Despite high prices in Spain, con­cerns remain that price bat­tles may ensue as retail­ers respond to con­sumer demand for lower prices and chang­ing behav­iors.

Spanish olive oil pro­duc­ers and super­mar­kets could be at the onset of a price war.

Coosur, a major olive oil brand, began sell­ing to its cus­tomers with­out inter­me­di­aries at sig­nif­i­cantly lower prices in mid-February, mak­ing it cheaper than it is sold for in Alcampo and Carrefour.

The pro­ducer sold a five-liter tin with a $10 gift card for €47.99, down from €57.75. First-time buy­ers enjoyed a dis­counted price of €40.79, bring­ing the final cost to €30.79, or €6.15 per liter.

It was a wel­come relief for fam­i­lies in Spain plagued for months with soar­ing olive oil prices. However, as pos­i­tive as the response has been from cus­tomers, there are con­cerns that such pro­mo­tions will lead to a price bat­tle.

After Greece, Spain sells the most expen­sive olive oil in Europe despite being the world’s largest pro­ducer.

Olive oil prices increased by more than 70 per­cent in the coun­try in 2023, with extra vir­gin olive oil sell­ing for around €9 in bud­get super­mar­kets.

High prices have sparked cus­tomer anger and spurred coun­ter­feits, thefts from mills and super­mar­kets, and spec­tac­u­lar police arrests.

The General Directorate of Consumer Affairs imposed €1.3 mil­lion in sanc­tions in 2022 for lower-qual­ity olive oil mis­la­beled as extra vir­gin, the largest of which was a €360,000 fine.

As recently as December 2023, 11 peo­ple were arrested for sell­ing adul­ter­ated olive oil on a large scale – a crim­i­nal case that spilled over into Italy.

The demand for lower prices has major retail­ers appear more will­ing to stand in the gap. Supermarket pro­mo­tions began just before Christmas last year and returned in February.

Government data indi­cates that Spain has pro­duced 775,300 tons of olive oil in the cur­rent crop year, 17 per­cent above last year’s his­tor­i­cally poor har­vest but sig­nif­i­cantly below the aver­age of the pre­vi­ous five years of 1.4 mil­lion tons.

According to data from Infaoliva, extra vir­gin olive oil prices at ori­gin have steadily decreased since the mid­dle of January, falling nearly five per­cent from €8.988 to €8.55 per kilo­gram presently.

Retailers have also been inspired to reduce prices due to lower demand and rapidly chang­ing con­sumer behav­ior.

The com­bi­na­tion of a poor har­vest, drought and increased pro­duc­tion costs caused olive oil prices to rise in super­mar­kets with no end in sight. For now, prices at the point of ori­gin show signs of turn­ing down­ward.

• Cadenasur
• Compradicción