Europe

Supermarkets in Spain Accused of Pricing Olive Oil Lower Than Cost

Supermarket chains are repeatedly reported for infringing the law by reducing prices lower than cost, while olive oil producers are losing a lot more than their patience.

Sep. 7, 2016
By Alexis Kerner

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Span­ish law pro­hibits the reduc­tion of the sales price of an arti­cle to lower than its cost at the ori­gin. For exam­ple, if bot­tled water is pur­chased at 50 cents per unit from a sup­plier, it may not be sold to the pub­lic at 45 cents.

Although there are some excep­tions to the law, the farmer´s orga­ni­za­tion, UPA, and the Com­mu­nity of Madrid hold firm that some super­mar­ket chains are in vio­la­tion of the law for their olive oil prices and are seek­ing legal action.

UPA has repeat­edly reported super­mar­kets such as Dia, El Corte Inglés, Car­refour, Super­cor and Car­refour online for ille­gal prac­tices to the Agency for Ali­men­ta­tion Infor­ma­tion and Con­trol.

The Agency for Ali­men­ta­tion Infor­ma­tion and Con­trol was estab­lished in 2013 under the Min­istry of Agri­cul­ture, Ali­men­ta­tion and the Envi­ron­ment in order to improve this cur­rent sit­u­a­tion and pro­tect the rights of pro­duc­ers.

They were first put to the test in 2014 when UPA reported Car­refour in vio­la­tion of the law for sell­ing 10 liters of olive oil for €18.85 (€1.89/liter) when the min­i­mum price had been set at €2.20/liter at the time.

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Two years have passed since that first report­ing and it remains com­mon prac­tice across Spain to lure cus­tomers by offer­ing extremely low prices on sta­ples like milk and olive oil.

The sales method is known as bait cebo” prod­ucts or hooks (enganches). Many com­pa­nies are get­ting away with it, while the olive oil mar­ket is deval­ued and pro­duc­ers suf­fer.

Last week the news spread on UPA´s report­ing of Dia´s repeat offence based on a flyer that was dis­trib­uted offer­ing refined olive oil for €2.19/liter when the price for lam­pante (the low­est grade of olive oil) has been around €2.75 for the last 12 months and never under €2.50.

The Com­mu­nity of Madrid took action by fin­ing El Corte Ingles €3,000 just a few days ago on sim­i­lar grounds. And although Madrid con­sid­ers the infrac­tion severe, many in the olive oil sec­tor are call­ing the penalty a mere slap on the wrist for such a large depart­ment store. Accord­ing to El Mundo sources, the renowned store has denied the accu­sa­tions.

Those in the olive oil sec­tor are hop­ing that other com­mu­ni­ties will fol­low in Madrid´s foot­steps by fin­ing more vio­la­tors. Action could help bring jus­tice to their hard work and pro­tect the future of the country´s olive oil indus­try.



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