Why Olive Oil Prices in Greece Aren't Falling

Summary

Despite a sig­nif­i­cant drop in olive oil prices at ori­gin in Greece, con­sumers are still pay­ing high prices in super­mar­kets and gro­cery stores. The Greek gov­ern­ment denied rumors of plans to penal­ize the trad­ing of 17-liter tins of olive oil, stat­ing that infor­mal exchanges between friends and rel­a­tives will not be affected.

In Greece, the reduced olive oil prices at ori­gin are not reflected in the retail mar­ket, as con­sumers con­tinue to dig deep into their pock­ets when buy­ing olive oil in super­mar­kets and gro­cery stores.

Producer prices for extra vir­gin olive oil in the coun­try have almost halved this year, rang­ing from €4.80 per kilo­gram in Crete to €5.30 per kilo­gram in Laconia in south­ern Peloponnese.

By com­par­i­son, in the pre­vi­ous 2023/24 crop year, prices at ori­gin peaked at nearly €10.00 for a kilo­gram of low-acid­ity extra vir­gin olive oil.

In addi­tion, the record olive oil prices in Greece were the main dri­ver behind the high food infla­tion recorded in the coun­try last year.

“Last year, with min­i­mum pro­duc­tion, prices at ori­gin were at €9 or even €10,” said Michalis Kabitakis, vice-chair of the Association of Agricultural Cooperative Organizations and Enterprises of Greece.

“There is no [olive oil] stock this year to jus­tify the high prices,” Kabitakis added. ​“Producers’ prices have dropped to €4.50 to €5.50 olive oil and still go for €11.50 to €14 a liter of extra vir­gin and for €8.50 to €10 a liter of vir­gin. This is pure prof­i­teer­ing.”

INKA, the Greek Consumers Institute, also protested the high olive oil con­sumer prices, with the head of the insti­tute, Yiorgos Lechouritis, accus­ing the olive oil indus­try and the whole­salers of price spec­u­la­tion.

The indus­try argues that ​“it paid a lot for last year’s stock, ​“Lechouritis said. ​“Once again, we are talk­ing about obscen­ity and spec­u­la­tion by the mid­dle­men. There should be inten­sive and real mon­i­tor­ing of the prices from the moment [the olive oils] leave the pro­duc­ers until they reach the super­mar­kets.”

Olive oil pro­duc­ers, for their part, argued that the mar­keters and mer­chants are respon­si­ble for the sig­nif­i­cant dis­crep­ancy between pro­ducer and con­sumer prices of olive oil in Greece.

“They are grab­bing the oil cheaply to sell it to con­sumers at high prices, thus mak­ing obscene prof­its to the detri­ment of pro­duc­ers and con­sumers,” the agri­cul­tural asso­ci­a­tion of Chandrinos from west­ern Messenia said in an announce­ment.

The asso­ci­a­tion also called on farm­ers to drive their trac­tors out of the fields to the roads and streets across Greece, argu­ing that ​“only with our protests and trac­tors in the streets have we been able to make gains.”

Meanwhile, a rumored gov­ern­men­tal inter­ven­tion to limit domes­tic trad­ing of olive oil in bulk has sparked con­tro­versy in Greece.

A com­mon prac­tice among Greek house­holds is to pur­chase freshly pro­duced extra vir­gin olive oil in 17-liter tins from small-scale pro­duc­ers, usu­ally a friend or rel­a­tive of the fam­ily.

After reach­ing record prices of €160 or more last year, this year, a 17-liter tin of high-qual­ity, low-acid­ity extra vir­gin olive oil is more plau­si­bly priced at €100 to €120. However, olive oil can only be traded in con­tain­ers of up to five liters.

According to some esti­mates, an undoc­u­mented quan­tity of 60,000 to 70,000 met­ric tons of bulk olive oil is traded in tins in Greece every year.

According to reports in Greek media, the gov­ern­ment is plan­ning to penal­ize with a hefty fine of €5,000 any car­rier of a 17-liter tin of olive oil with no con­sign­ment note.

Olive oil pro­duc­ers protested the alleged reg­u­la­tion, argu­ing that the mea­sure is designed to fill the government’s cof­fers and will also impact their income.

“The mea­sure planned by the gov­ern­ment is unwork­able and has the sole pur­pose of impos­ing puni­tive fines on pro­duc­ers at a time when the unbear­able pro­duc­tion costs are con­stantly ris­ing,” Kabitakis said.

The Greek gov­ern­ment quickly refuted the media reports, rul­ing out any planned changes in the coun­try’s estab­lished trade of bulk olive oil in 17-liter tins for pri­vate use.

“What we have heard in the last few days is not true,” said Christos Dimas, the Greek deputy finance min­is­ter. ​“The trans­fer of small quan­ti­ties of olive oil between friends and rel­a­tives con­tin­ues infor­mally with­out any infringe­ment issues.”

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