Tunisia's Olive Oil Price Cap Gets Mixed Response from Consumers

The government capped the price of olive oil to keep household costs down, but locals question the efficacy of the plan.

Tunis, Tunisia
By Ofeoritse Daibo
Feb. 1, 2024 20:07 UTC
366
Tunis, Tunisia

There is an active debate in Tunisia over the effec­tive­ness of the government’s strat­egy to lower con­sumer prices more than a month after it announced a price cap on domes­tic olive oil sales.

In December 2023, the gov­ern­ment capped the price of olive oil dis­trib­uted by the National Olive Oil Office (ONH) at 15 dinars (€4.55) in local super­mar­kets due to con­cerns that prices were ris­ing faster than house­hold incomes. At the time, local olive oil prices at retail were expected to rise to 25 dinars (€7.40) per liter.

Local media sources noted that over­all, cus­tomers were happy with the ini­tia­tive in the con­text of the cur­rent eco­nomic cri­sis. For exam­ple, Tarek, a young cafe man­ager, said he was pre­pared to buy a liter of olive oil for 15 dinars rather than for 24 or 25 dinars.”

See Also:Tour in Tunisia Explores Olive Oil Culture and Cuisine

However, there are some ques­tions about the gov­ern­men­t’s media nar­ra­tive, and not all feed­back has been pos­i­tive. On Facebook and other social media plat­forms, users noted that receiv­ing one and a half liters” of sub­si­dized olive oil was not enough to make any real dif­fer­ence in house­hold liv­ing costs. How many Tunisians con­sume one and a half bot­tles of olive oil a year?” asked another social media user.

Close to 11 mil­lion liters of olive oil will be made avail­able to Tunisian house­holds. Moez Ben Amor, the com­mer­cial direc­tor of the ONH, said the sup­ply will be suf­fi­cient to cover the needs of Tunisians.

Despite assur­ances, the plan has proven chal­leng­ing to imple­ment. For one, the gov­ern­ment strug­gled to meet demand when the first stocks arrived in stores.

People post­ing online noted that they could not find the marked-down olive oil in their neigh­bor­hood super­mar­kets, with social media users such as Ben Youssef ask­ing: Where is it avail­able?”

Media sources reported that the first bot­tles to arrive on the shelves were sold within a few hours. In response, Ben Amor called on con­sumers to avoid a frenzy. A sim­i­lar rush was seen in stores in recent months due to the lack of milk, which was rationed to two packs per per­son, and sugar and cof­fee short­ages.

There also appears to be a con­flict between super­mar­ket pric­ing above the cap and the gov­ern­ment attempt­ing to keep prices below the cap.

Olive Oil Times reviewed online super­mar­kets deliv­er­ing gro­ceries in Tunis, which has a metro area home to roughly a quar­ter of the pop­u­la­tion. Only one, Carrefour, sold extra vir­gin olive oil from the ONH priced at 15 dinars per liter. The ONH brand was unavail­able in the other stores.

Branded olive oil sold per liter in Monoprix ranged from 20 to 36.8 (€5.92 to €10.89) dinars and 10.3 to 13 (€3.05 to €3.85) dinars for a 250-mil­li­liter bot­tle. At Carrefour, a stan­dard bot­tle of vir­gin olive oil was sold at 14 dinars (€4.14) per liter and 31.9 dinars (€9.44) at Maximarket per liter.

While speak­ing to a local radio sta­tion, a cus­tomer pre­dicted that peo­ple may take advan­tage of the scheme to make a profit. For exam­ple, farm­ers or resellers [could be more tempted] to mix and adul­ter­ate the oil to avoid los­ing money [from the price cap]. Setting such a price also has a neg­a­tive impact on olive oil pro­duc­ers.”

Indeed, in early January, a team com­posed of local, regional and national author­i­ties seized 1,420 liters of olive oil adul­ter­ated with other oils.

According to the World Bank, Tunisia’s per­sis­tent drought has left a dent in its eco­nomic pros­per­ity, but mea­sures such as price caps may exac­er­bate the prob­lem.

The agri­cul­tural sec­tor, in par­tic­u­lar, has been hit the hard­est, caus­ing exter­nal financ­ing chal­lenges, increas­ing domes­tic debt and higher prices of sta­ple goods. Inflation rose to 9 per­cent in September 2023, and emi­gra­tion has become vital for Tunisians cop­ing with eco­nomic hard­ships.

Although the gov­ern­ment has inter­vened with mea­sures to fix domes­tic prices, this sys­tem of price con­trol that reg­u­lates key sta­ple mar­kets is a key dri­ver of the increas­ing indebt­ed­ness of state-owned enter­prises as well as short­ages,” accord­ing to the World Bank.

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Customers on social media have asked for a 30 per­cent reduc­tion in all agri­cul­tural prod­ucts,” includ­ing dates and fish, in the face of soar­ing food prices. Others noted that the price of 10 dinars (€2.96) would have been more rea­son­able for Tunisians.”

Domestically, olive oil is a sig­nif­i­cant com­po­nent of Tunisian cui­sine. It is vital in var­ied meze dishes, stews and cous­cous, the national dish.

However, Tunisia’s olive oil pro­duc­tion is export-ori­ented, and almost 80 per­cent of olive oil, equiv­a­lent to 195,000 tons in 2023, is des­tined for Spain and Italy, which has angered some social media users.

Olive oil is a prof­itable busi­ness in Europe but a poor export com­mod­ity for Tunisia since we sell it cheaply in vats that are rebot­tled as a European prod­uct,” one wrote.

Outside the cap­i­tal, the gov­ern­ment has assured fair and even dis­tri­b­u­tion across the coun­try. In January, the regional direc­tor of com­merce in the gov­er­norate of Kairouan, Adel Ben Helima, dis­trib­uted 900 kilo­grams of bulk sugar and 900 liters of olive oil in the main com­mer­cial areas of Kairouan.

However, social media users remain skep­ti­cal and have pushed for more trans­parency, ques­tion­ing whether the gov­ern­ment is sim­ply remov­ing old olive oil.” In response, Ben Amor spec­i­fied that the oil is of supe­rior qual­ity from the 2023/24 crop year.

The mea­sure is set to remain until Ramadan (April 2024), accord­ing to Houssem Eddine Touiti, the direc­tor gen­eral of com­pe­ti­tion and eco­nomic inves­ti­ga­tions at the Ministry of Commerce.



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