`Uncertainty in Greek Olive Oil Industry as Government Struggles to Avoid Default - Olive Oil Times

Uncertainty in Greek Olive Oil Industry as Government Struggles to Avoid Default

Jun. 11, 2015
Lisa Radinovsky

Recent News

The world is won­der­ing whether the Greek gov­ern­ment will come to an agree­ment with its cred­i­tors that will enable the coun­try to avoid default­ing on its debts and stay in the Eurozone. With an eco­nomic cri­sis con­tin­u­ing, bil­lions of euros have been with­drawn from Greek banks in recent months, and a quar­ter of the work­force remains unem­ployed. No one is sure what will hap­pen to the econ­omy, which is back in reces­sion after slight signs of improve­ment last year.

Like other Greeks, olive farm­ers are look­ing for steady income. Many earn ready money by sell­ing their oil in bulk, a fact almost uni­ver­sally deplored by indus­try com­men­ta­tors. According to Ekathemerini, a recent report by the National Bank of Greece claims that stan­dard­iza­tion of Greek olive oil could bring the econ­omy an addi­tional €250 mil­lion per year from exports, plus another €85 mil­lion for the state from sales tax. Only about 27 per­cent of Greek olive oil is stan­dard­ized to date ver­sus 50 per­cent in Spain and 80 per­cent in Italy, although far more Greek olive oil is extra vir­gin (80 per­cent, com­pared with 65 per­cent in Italy and 30 per­cent in Spain, as the Greek ver­sion of the arti­cle notes).

As Bloomberg reported, Terra Creta S. A. in Kolymvari, Crete is one com­pany that offers farm­ers a bet­ter option than a Greek bank these days, given the chance that Greece may leave the Eurozone and return to the drachma, poten­tially devalu­ing sav­ings. Terra Creta pays cash for olives, the farm­ers know their oil is safely stored under con­trolled con­di­tions where its value will be pre­served, and they under­stand that their har­vest will be used to make bot­tled and branded Greek olive oil that reaches inter­na­tional mar­kets. Terra Creta’s exports are part of an increase in Greek olive oil exports dur­ing the first three months of 2015, when Agronews noted that 50,869 tons brought the strug­gling coun­try €178.2 mil­lion, accord­ing to the Panhellenic Exporters Association and the Center for Export Research and Studies.

During this suc­cess­ful first quar­ter, Greek olive oil has been mak­ing inroads in at least one place Italy used to dom­i­nate: Costco Wholesale Corporation in the United States. The Greek olive oil indus­try took what Terra Creta’s Fotis Sousalis called a half step” toward a break­through into the American mar­ket when Costco decided to use Greek oil instead of Italian for its Kirkland Signature 2‑liter bot­tle of extra vir­gin. The Seattle Times reported that this occurred after Italian olive oil pro­duc­tion dropped by a third, and its prices increased by 84 per­cent in March com­pared to the pre­vi­ous year.


On the one hand, Sousalis sug­gested in an inter­view, this might help con­vince American buy­ers they can get a good prod­uct, good prices, and reli­able coop­er­a­tion from Greek com­pa­nies. So far, only 4 per­cent of Greek olive oil is exported to the U. S., and Americans are largely unaware of its high qual­ity. On the other hand, Sousalis told Olive Oil Times, Costco is buy­ing olive oil pro­duced in Mylopotamos, Crete that was sold to Italy in bulk and bot­tled in Italy, so Greeks are not ben­e­fit­ing from much of the added value.

Greece needs as much income as it can get right now. As Agrocapital reported, farm­ers are wor­ried about last week’s pro­pos­als by the European Commission, the European Central Bank, and the International Monetary Fund, which could effec­tively dou­ble Greek farm­ers’ income taxes while reduc­ing their sub­si­dies. The com­ing days will show whether the Greek gov­ern­ment will come to an agree­ment with those insti­tu­tions, and on what terms.

Meanwhile, a less com­plex inter­na­tional agree­ment was con­cluded. According to Olive News, at a meet­ing in Zakynthos, inter­na­tional pro­fes­sion­als in the fields of sci­ence, nutri­tion, health, gas­tron­omy, and com­mu­ni­ca­tions agreed last month to estab­lish the non-profit Oleocanthal International Society (OIS). Dr. Jose Antonio Amerigo, pres­i­dent of the Andalusian Oleocanthal Society, sug­gested that the new inter­na­tional soci­ety be formed. The ini­tial meet­ing was chaired by Professor Gary Beauchamp of the Monell Center in Philadelphia and coor­di­nated by asso­ciate pro­fes­sor Prokopis Magiatis of the University of Athens.
See Also:An International Society for Oleocanthal
The OIS will be head­quar­tered in Spain, with meet­ings alter­nat­ing between Spain and Greece, start­ing in Andalusia in October. The soci­ety will aim to pro­mote research and increase pub­lic aware­ness of the health ben­e­fits of olive oils that are rich in oleo­can­thal and other phe­nols. It also intends to advise the olive oil indus­try, pro­duc­ers, and leg­is­la­tors regard­ing health claims for olive oil and mea­sure­ment of these key com­po­nents.

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