`On the Continuing Downward Slide of Olive Oil Prices in Greece

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On the Continuing Downward Slide of Olive Oil Prices in Greece

Jan. 1, 2015
By Athan Gadanidis

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In Crete, bulk prices for pre­mium qual­ity EVOO with less than 0.3 acid­ity have dropped as low as €2.60 ($3.16) per kilo. Olive grow­ers des­per­ate for cash flow are sell­ing at alarm­ingly low prices. The Greek media are blam­ing Ital­ians buy­ers for not offer­ing higher prices. They also blame the Cre­tan olive mills for not stor­ing it and wait­ing for higher prices. Some are even blam­ing the olive grow­ers for har­vest­ing too quickly and cre­at­ing a tem­po­rary over­sup­ply.

Why are olive mills so quick to unload their high­est qual­ity EVOO at the low­est prices in Crete? Most are deeply in debt and need to sell to keep oper­at­ing. The banks are not lend­ing or extend­ing credit at rea­son­able inter­est rates or terms, so many are forced to sell now. Prices in other provinces in Greece are barely hold­ing above €3.00 to €3.20.

The drop below €3.00 in Crete is cause for con­cern among other olive oil pro­duc­ing areas in Greece as well. They do not want to see a down­ward trend sweep across Greece. Some enter­pris­ing and well-financed olive mills, how­ever, are tak­ing advan­tage of the low prices, buy­ing and hold­ing the stock with the aim of sell­ing at higher prices in the new year.

An indus­try in cri­sis

A look at the demand for new bar­codes with the Greek pre­fix for 2014, which can be viewed as an indi­ca­tor of new prod­uct devel­op­ment, shows there has been an increase for demand in all sec­tors by an aver­age of 50 per­cent. The only sec­tor where demand for new bar­codes has decreased — by 40 per­cent — was the olive oil indus­try. In con­trast the food and bev­er­age indus­try saw an increase of 68 per­cent for the same period.

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This is another stark indi­ca­tion that Greece has failed to develop the olive oil indus­try — one that is based on the unique taste char­ac­ter­is­tics, health ben­e­fits and rich his­tory of Greek olive oil. This fail­ure is one of the most heart-break­ing aspects of this present day eco­nomic cri­sis.

Shoot­ing the Mes­sen­ger

My last arti­cle on the fears of how low prices may effect the qual­ity of olive oil Greeks will be con­sum­ing this year ruf­fled a few feath­ers. Some lamented that olive oil com­pa­nies would lose money directly as a result of an open exam­i­na­tion of the prob­lem. A Greek web­site claimed they had received phone calls and com­plaints. This is the type of hyper­bole that mir­rors the state of the olive oil indus­try in Greece today.

The fact is, 70 – 80 per­cent of our exported, high-qual­ity EVOO is being sold off at the low­est prices to Ital­ians and other for­eign buy­ers in bulk. The ques­tion the Greek gov­ern­ment, olive oil com­pa­nies and blog­gers need to answer is: why are the prices drop­ping dur­ing a period of lim­ited sup­ply? We are not alone in this race to the bot­tom of the price pool. There is another coun­try that is strug­gling to add value as it sells its liq­uid gold off in bulk at lower prices: Tunisia

Ital­ian and the Span­ish Olive Oil Com­pa­nies are Thriv­ing

In con­trast, Ital­ian olive oil com­pa­nies who had to deal with some very real stig­mas to their rep­u­ta­tion are thriv­ing. Hon­est and hard work­ing Ital­ian olive oil com­pa­nies have man­aged to flour­ish in spite of the stigma of adul­ter­ation in the past and even into the present. They have become so suc­cess­ful they are forced to buy up Greek or Tunisian EVOO in bulk in order to fill their orders. Pro­duc­ers in Spain have bounced back from adver­si­ties and are thriv­ing. What is wrong with the Greek olive oil indus­try?

Infight­ing is the Real Stigma of Greece

Inter­na­tion­ally, Greece is rec­og­nized as the cra­dle of mod­ern civ­i­liza­tion with the olive tree as its eter­nal sym­bol. It is home to some of the best EVOOs on the planet but has failed to take its right­ful place at the top of the olive oil mar­ket­ing and sales leader­board. Regional infight­ing and mis­man­age­ment, cou­pled with a con­stant search for scape­goats to blame for fail­ures is the real stigma that is becom­ing increas­ingly dif­fi­cult to over­come. Attack­ing those who are sup­port­ing the Greek olive grow­ers in their strug­gle will not absolve any­one of their respon­si­bil­i­ties. The steps that need to be taken are not dif­fi­cult to com­pre­hend, but they do require self-sac­ri­fice and a more proac­tive approach.

Hel­lenic Past Glory

Our ancient Hel­lenic cul­ture is the ulti­mate cam­paign for olives and olive oil, like the crown­ing of a vic­to­ri­ous Olympic ath­lete with a wreath made from wild olive twigs. Mod­ern Greek politi­cians and their olive oil indus­try friends have taken this legacy of great­ness and are sell­ing it off in bulk. They need to show true lead­er­ship and use their power and influ­ence to orga­nize and uplift the olive oil sec­tor in Greece and not only their nar­row indi­vid­ual or regional inter­ests. Too many times our ancient Hel­lenic cul­ture is used in their mar­ket­ing cam­paigns but not in their actions. They boast about our past Hel­lenic cul­ture, but those in posi­tions of power fail to exem­plify it.

There is an ancient Hel­lenic maxim taken from one of Aesop’s tales The Boast­ful Ath­lete.” In the fable, a proud ath­lete makes the claim that in the past he achieved a record-break­ing long jump in com­pe­ti­tion on the island of Rhodes. A bystander chal­lenges him to dis­pense with the boast­ing and sim­ply repeat his record-break­ing jump on the spot: Here is Rhodes, lets see you jump here!” (ιδού η ρόδος, ιδού και το πήδημα!)

New Ways to Add Value to Greek Olive Oil

More recently, Greek sci­en­tists invented a method of accu­rately mea­sur­ing the indi­vid­ual phe­no­lic com­pounds in EVOO using Nuclear Mag­netic Res­o­nance (NMR). They have been able to use the new tool to prove why ancient doc­tors like Hip­pocrates and Dioscourides bestowed upon olive oil some very spe­cific health ben­e­fits stem­ming from the vari­etal, method of cul­ti­va­tion and time of har­vest.

The secret of olive oil is in the type and quan­tity of spe­cific polyphe­nols it con­tains. A num­ber of small, cre­ative and inde­pen­dent olive mills in Greece have adapted their meth­ods and used NMR mea­sure­ments effec­tively to pro­mote their EVOO at much higher prices. Over the last two years, Olive Oil Times has ded­i­cated a great deal of space to report­ing on this new method of mea­sur­ing the health­ful­ness of olive oil. The Greek gov­ern­ment and the big olive oil com­pa­nies how­ever, have sim­ply ignored it or tried to sti­fle it.

Oppor­tu­ni­ties Wasted

If the Greek gov­ern­ment and the big olive oil com­pa­nies sup­ported NMR two years ago, the Inter­na­tional Olive Coun­cil (IOC) and the EU would have already accepted it as an offi­cial method of mea­sure­ment. The irony is that the IOC recently requested sub­mis­sions for new meth­ods of mea­sur­ing indi­vid­ual polyphe­nols — as if the NMR method never even existed. The Greek author­i­ties and the olive oil com­pa­nies have wasted two years.

The inven­tion of NMR and its val­i­da­tion by the IOC could have been used in a global mar­ket­ing cam­paign by the Greek olive oil indus­try to affirm our Hel­lenic ances­tors’ love affair with the health ben­e­fits of olive oil. Infight­ing and lack of vision and cre­ativ­ity have plagued the Greek olive oil indus­try and are the real cause of its fail­ure.

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