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The global olive oil market is bracing for a period of renewed uncertainty following a series of transformative events in Spain, the world's leading producer. Supermarket prices, which have largely remained resistant to falling wholesale costs, now face upward pressure as corporate consolidation and unprecedented state intervention reshape the landscape.
In a landmark corporate move, the Spanish producer Dcoop and bottler Acesur have finalized a €520 million (£429 million) agreement to acquire Deoleo, the owner of the Bertolli brand. This merger is poised to create a dominant European olive oil powerhouse with significant market influence. Parallel to this, the Spanish government has mandated that nearly 200,000 tonnes of olive oil be withheld from the market until September 2027. This intervention is specifically designed to halt the decline in wholesale prices and safeguard the profit margins of local growers.
Walter Zanre, the UK managing director of Filippo Berio, which sources bulk oil from Dcoop, described the acquisition of Deoleo as a 'historic and seismic' shift. He warned that Dcoop’s strengthened position could allow it to dictate market prices, prioritizing value for its cooperative members by maintaining higher price points for bottlers and other partners.
The government’s decision marks the first modern instance of such intervention in Spain. It comes in response to a projected bumper harvest of 1.6 million tonnes for the 2026/27 season, representing a 23% increase over the previous year. Additionally, reserve stocks have climbed to nearly 360,000 tonnes. Under the new rules, Spanish mills are required to withdraw 12% of their production, with the flexibility to choose between extra virgin, virgin, or lampante grades.
Market reactions were immediate, with the online tracker Pool Red reporting a 6.3% increase in extra virgin olive oil prices to €3,223 per tonne. This follows a dramatic period for the European market, where average prices crashed from a peak of €9.06/kg in early 2024 to approximately €3.30/kg by November 2024, as the industry recovered from severe drought conditions.
Gary Lewis, head of business development at KTC Group, noted that UK retail prices have not yet fully mirrored the wholesale slump due to existing high-cost inventory. However, he warned that the Spanish intervention might be 'short-sighted,' potentially driving price-sensitive consumers back toward sunflower oil. Furthermore, with competing nations like Morocco, Tunisia, Italy, and Greece expecting healthy crops, Spain's strategy of artificial supply reduction could inadvertently open doors for international competitors to capture new market shares.
Source: The Grocer