Olives Cheaper, Yet Price of Oil Isn't

Producers, retailers both deny any responsibility.

The price of olive oil in Europe dropped by 4.6% in the first half of this year, and the price manufacturers paid growers for their olives fell even more steeply. Nevertheless, the price of olive oil in Israel rose by about 7% during those six months, the market research firm Nielsen found.

Nielsen checked prices at the big supermarket chains, minimarkets and groceries - anywhere where olive oil sales were recorded by a barcode.

The retail chains that import olive oil directly from Spain and Italy typically pay NIS 15.50 to NIS 16 a bottle and then resell it to the consumer for an average of NIS 40.

Sales data from another market research firm, Store Next, found that shelf prices for most brands of olive oil, including Halutza, Etz Hazayit, Borges, Yad Mordechai, Zita and Jahshan, have risen recently, in spite of the drop in retail prices in Europe and in the price of olives grown in Israel. Manufacturers say the latter fell by about 10%, while the Olive Council puts the drop as high as 25%.

The price of a one-liter bottle of Zita, for instance, has risen 14%, from NIS 38.08 on average in January to NIS 43.40 in the first two weeks of July. Yad Mordechai's product rose by even more, 21%, to NIS 44.69 on average from NIS 36.68.

The producers insist they have not raised prices to the retail chains, and that it's the retailers who have driven up the shelf price. They say they have no control over what the consumer pays and can do no more than suggest a retail price.

An executive at Zita, speaking on condition of anonymity, said his company actually cut the wholesale price this year. Others had not responded by press time.

But retailers deny that producers have changed their official prices for olive oil, though acknowledging that the producers have offered spot discounts.

One, who also spoke on condition of not being identified, insisted that his mark-up on imported olive oil was not that high, as his company pays between NIS 17 and NIS 25 a liter for imported oil.

The Super-Sol supermarket chain declined to comment.

TheMarker reported last week that Industry, Trade and Employment Minister Shalom Simhon and Agriculture Minister Orit Noked agreed to set up an interministerial committee to investigate the state of the olive-growing industry.

The panel will make recommendations on how to improve the situation within a month.

The committee is expected to produce a five-year plan to solve the industry's crisis, including proposals for protecting domestic growers, more effective quality control and a promotional campaign to increase awareness of quality issues among growers.

Among the growers' complaints is the competition from olive oil imported from Europe, which they say is subsidized, as well as the sale of cheaper oil under false labels.

The committee heard reports that some growers were uprooting their trees because the economics of the business were so poor.

Israel has about 250,000 dunams of ordinary olive groves and another 75,000 of irrigated groves, of which 60,000 have begun to produce harvests. Most of the growers are Arabs. Next year, production is expected to reach 19,000 tons, enough to fully supply the domestic market.

An olive.
Nir Kafri
Olive oil: Higher by the bottle.