`Greeks Turn to Lower Quality Olive Oil During Crisis - Olive Oil Times

Greeks Turn to Lower Quality Olive Oil During Crisis

Dec. 28, 2011
Costas Vasilopoulos

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A new study of the ICAP con­sul­tants and busi­ness intel­li­gence group addresses cer­tain issues of the olive oil indus­try in Greece in the con­text of the finan­cial cri­sis.

During the 2009 – 2010 sea­son the domes­tic olive oil pro­duc­tion was reduced by 4.3 per­cent com­pared to the pre­vi­ous sea­son. Contrary to what some­one might expect, the study does not cor­re­late the decrease in pro­duc­tion with the cri­sis, but rather with the weather con­di­tions pre­vail­ing each har­vest­ing sea­son.

On the other hand, the lim­ited resources of the house­holds in con­junc­tion with the rel­a­tively high retail price of olive oil has lead to a decline in olive oil con­sump­tion by 6.1 per­cent, rep­re­sent­ing a typ­i­cal man­i­fes­ta­tion of a mar­ket fail­ure where the mar­ket price does not decrease as expected due to lim­ited demand.

Standardized oil had a remark­ably big decline in demand dur­ing the period of 9.3 per­cent because of com­pe­ti­tion from bulk olive oil — a phe­nom­e­non which, accord­ing to the study as com­mented by the press, is again due to the cut in house­hold income. Meanwhile, there was an increased demand for the cheaper and sup­pos­edly lower qual­ity pri­vate label olive oil made by inde­pen­dent pro­duc­ers.

Despite the great ben­e­fits of olive oil stan­dard­iza­tion exam­ined recently, pro­duc­ers in Greece still rest on bulk olive oil. Hence, the study says, the big­ger part of oil exports (mainly to Italy) is bulk oil and approx­i­mately half of the inland con­sump­tion is bulk olive oil again, mean­ing lim­ited rev­enues for the pro­duc­ers.

The study finds the Greek oil mar­ket mature; still, it demon­strates infan­tile dis­eases.



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