Lorraine Williamson
A promising olive harvest has caused a sharp decline in commodity prices, leading to a significant reduction in the cost of extra virgin olive oil. This trend is particularly evident in private label products, which dominate over half of Spain’s olive oil market.
In recent days, distribution chains have reduced the price of private label extra virgin olive oil to below €7 per litre. This marks a notable shift after a prolonged period of high inflation.
New benchmark price for private labels
The new reference price for a one-litre bottle of private label extra virgin olive oil is €6.75. This price is consistent across physical stores and online platforms operated by major food distributors. Compared to 1 October, this reflects an average price drop of 25%.
Earlier in the year, prices were inflated due to the reintroduction of a 2% VAT. The tax had been suspended temporarily to counter the effects of rising costs.
Price comparisons across supermarkets
Several major supermarkets now sell private label extra virgin olive oil at the same reduced price:
- Mercadona, Consum, Aldi: €6.75 per litre
- Carrefour, Alcampo (online): €6.74 per litre
- El Corte Inglés: €6.89 per litre
Manufacturer brands remain expensive
In contrast, branded olive oils, such as Carbonell and Coosur, have maintained higher prices. These products cost over €10 per litre in most supermarkets. For instance, Carbonell’s average price remains at €12.66 per litre, reflecting only a 5% reduction since October.
Discounts and promotional campaigns
Promotions partially explain the price differences. For example, El Corte Inglés offers a litre of Carbonell for €12.99 but reduces the cost to €8.66 when customers purchase three litres. Additionally, contracts signed before recent price declines have locked branded products into higher pricing.
Private labels are less affected by these factors due to their larger market share and shorter supply chains.
Olive oil production and market trends
The drop in supermarket prices aligns with decreasing wholesale costs since October, when the new olive harvest began. According to the Ministry of Agriculture, crude olive oil prices fell to €531.57 per 100 kilos by 8 December. This represents a 27% decline since early October. Despite this drop, prices remain 63% higher than three years ago and more than double those of four years ago.
Promising harvest boosts market optimism
The current olive harvest is expected to yield 1.26 million tonnes, nearly 50% more than the previous season. Producers, including Deoleo, Dcoop, Acesur, and Borges, predict that price reductions will become more apparent by late December and early January.
Spain: Leading producer of olive oil
Spain is the world’s largest producer of olive oil, accounting for nearly half of global production. Andalucia, in southern Spain, is the heart of the country’s olive oil industry, thanks to its ideal climate and fertile soil. Other leading producers include Italy and Greece, but Spain remains dominant in both quantity and quality.
How olive oil is made
The production of olive oil begins with the harvest of olives, typically in autumn. Once harvested, the olives are washed and crushed into a paste. This paste is then pressed or centrifuged to extract the oil. Extra virgin olive oil, considered the highest quality, is made without the use of heat or chemicals, ensuring a pure and unaltered flavour. After extraction, the oil is filtered and stored in stainless steel tanks to preserve its freshness before being bottled and distributed.
Could prices fall below €5 per litre?
Antonio Luque, president of the Dcoop cooperative, believes the steepest price cuts have already occurred. However, he anticipates further declines before the year’s end. Luque does not rule out the possibility of prices dropping below €5 per litre, returning to levels seen before the inflation surge.
This development offers some relief to consumers and signals a potential stabilisation in the olive oil market after months of volatility.
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