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.

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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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