Supermarkets in Spain Accused of Pricing Olive Oil Lower Than Cost

Summary

Spanish law pro­hibits sell­ing prod­ucts below their cost of ori­gin, with some excep­tions. The farmer’s orga­ni­za­tion UPA and the Community of Madrid are tak­ing legal action against super­mar­ket chains for vio­lat­ing this law by offer­ing olive oil at prices below the min­i­mum set price.

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.

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.

• El Mundo


• UPA


• Ministero de Agricultura, Alimentatción y Medio Ambiente


• Agencia de Información y Control Alimentarios (AICA)