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

Summary

The Tunisian gov­ern­ment imple­mented a price cap on domes­tic olive oil sales in December 2023 to address ris­ing prices, but there is debate over its effec­tive­ness. While some con­sumers are happy with the ini­tia­tive, there are con­cerns about avail­abil­ity, qual­ity, and poten­tial neg­a­tive impacts on olive oil pro­duc­ers due to the price con­trol mea­sures.

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.”

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.

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.

• Tunisie Numerique
• La Presse