Before reading this article, I was not aware that Europe is currently living through an olive oil disaster caused primarily by "Italy's black year of olive oil". Allegedly, the other European olive oil producers have also been hit. I have no information about Greece's olive oil production this year but the thought comes to mind that production problems happening in one country can open opportunities for production in other countries. I would be curious to learn more about this situation.
The production is very good, but the problem is the lack of organized business. 70% is sold bulk to Italians, who bottle it and sell it as italian at double the price.
ReplyDeleteTo give you an idea of how the "oil business" doesn't work in Greece. A friend of mine has olive groves as secondary activitity. He told me, that he or any other producer, can't sell it directly, he is forced to go through either aricultural association or through gross dealer, because that's EU directive (given what follows, passed probably with italian and spanish pressure). His local agricultural association, does... nothing. When he challenged the president on why don't they try to bottle up and export say to China, his reply was "the Italians dominate the chinese market, we can't penetrate".
ReplyDeleteNow, the funniest thing, is that the Italians import 70% of the greek oil production, with which they dominate the markets. I believe you see the paradox and irony here. Greece has i think the highest production in extra virgin olive oil, while in Italy only half of the production is extra virgin and in Spain about 20%. So the Italians "dominate" with... greek extra virgin oil... Which they buy for nickles and they sell for high price once they bottle it up.
Unfortunately, the troika is more obsessed with raising VAT than with such "trivial" things as exports. After all, they are in Greece to collect money...
The greek goverment is also too "occupied" with running behind troika demands to pay attention to such "small" details. Greece has the potential to challenge the Italians eye to eye on extra virgin olive oil, if only someone in the ministries decides to do something coordinated about it.
Of course, there is the added problem of the banks not financing easily new ventures, so it's a bad period to try to reinvent and wheel and sell the greek oil as such, instead of giving the Italians all the glory and profits.
So, don't worry about Italy's low production. It only means they will buy more bulk greek oil for pennies and sell it for euros... In Greece after 30 years of pasokism as dominant ideology, "doing business for max profit" is a forgotten art. Lucky Italians. Do you know what's the classic label in italian bottles? "Made from EU extra virgin oils". It's a nice way to say "greek oil".
The Troika's role is not to strengthen the Greek economy, regardless what the commercials say. The Troika strictly represents the interests of creditors who would like to minimize their losses.
DeleteThe EU Task Force would be the right addressee. In fact, I would have thought that, with an industry as important as the olive oil industry and with so much potential, to optimize that would have been one of the ETFGs first prioritites. Does anyone have any idea whether the ETFG has worked on this subject?
Do you know who has the domain for "kalamata olives" in Italy? A greek? No! An italian! Ficacci. He buys kalamata olives (which are famous) bulk, puts them in a plastic container with salted water, and sells them with his name.
ReplyDeletehttp://www.olivekalamata.it/
Don't tell the troika, it's not an important thing.
Nice Article:
ReplyDeleteAs I am also venturing in this direction as all Greeks are as well, I can write a few points on this. Indeed Italy is having a disaterous Olive Oil production year. Whether it be the bad or strange weather, too many rains followed by olive fly infenstations, their yield will be incredibly low.
Greece on the other had is having an epic year so far. Unfortunately, my data is through "hearsay," but the data is accurate. The greater portion of the islands, main land Attikh, Peloponese, Archadia, Crete and Evia, are having a great year. To add the acidity of the production this year is even better. Personally, I produced an extra virgin olive oil of 0,2 acidity and ratio of 15% of fruit to oil. Totaling 400 kilos. The quality has shined on us this year coupled with the fact that we had two consective low yield years. As so you know; low and high yield years are alternatively change annually and not usually every 2 years. Other factors come into affect such as type of olive tree but i will not get into this now.
My friend the problem is that it is quite difficult to export and sell. Unless you have an olive press business, or a small business you can not sell directly to the rest of the world. Currently as a small producer you can only sell to Minerva or Elaias. They buy they bottle their own and the also export in bulk. Olive presses can also export but usually it is better to close a deal with the two big buyers. The problem is the price. Last year on a low year extra virgin olive oil was being purchased by wholesalers at 3,30 euro/kilo This year with such a high yield the price will drop to 3 euro/kg. On average costs are high. Most people can not go below 3 euro and are lucky to get to 2 euro/kg. Profits go to the wholesaler and big companies again. Yes this is an economical opportunity, but for small producers it not that easy.
Personally, I have a business prospect for olive oil. My current cost is at 4,5 euo/kilo but down 220% from 4 years ago when i was getting intially involved. I hope to get down to 2 euro/kilo by 2016 (next big yield year) and with an output of 600 kilos. By 2020 i will reach 1 ton of extra virgin with possible business prospects.
Olive oil has always been Greece's opportunity. We have used it to some extent but breaking a barrier is quite hard. Most people though are involved in their olive oil fields once again. It needs time though. Trees and field managment does not improve in a blink of an eye but in time.
BTW: I managed to find one customer in Italy and sold at 4,30 euro/kilo. Basically at cost. Essentially i would like to acquire a future customer meanwhile I have increased income over local buying price at presses. Coupled with cost reduction of 2 more euro this will become a small side pesonal business one day. (Hopefully)
Our Greel quality Olive is impecable thought his year. Buy some.
Sincerely,
V
@ V
DeleteYou know what's the problem? You will never manage to compete with Italians, if each producer goes for his own. The Italians have scale economy advantage. In Italy, shelf prices for 1lit of extra virgin, vary from 4.5 to 6,5 euros, but in supermarkets, you find regular offers with 3-3.5 euros the bottle. Even small family italian companies, can afford such offers. Why? Because they have big market and because they don't buy JUST from Greece. The Italians do buy a lot of greek extra virgin, for the high quality/low acidity, but they also buy much cheaper from north Africa (yes, they do have olive trees) and the Balkans (Croatia mainly) and they mix them up in the same bottle and with italian oil, in various proportions. So they don't sell you 100% of their most expensive oil and they do so in a big market. The bigger companies export too, so they can rely on even bigger customer base and they sell at higher prices to other countries, so they maximize their profit from there.
In Greece, you will never make it to do anything other than the cheap bulk producer, if you don't overhaul and use the the agricultural associations as local export companies. Gather up all the producers of a region and become like partners in a common bottling/exporting company. Small Italian firms survive becuase they own a little olive press where they can process the olives on their own.
Same goes for olives. You sell them bulk to the Italians for a misery. The Italians sell their "best olives", the Gaeta olives, which i assure you, are nothing compared to the kalamata ones, it's just the italian pride that makes them think they are unparalleled, in plastic containes with salted water at minimum 1.6 euros per 230gr net product. Or, they take the normal olives, often bought in bulk in Greece, and make them "condite", with hot red peperoni, garlic and origano and these sell up to 9 euros/kg.
http://www.olivecondite.it/
My friend who has olive groves, tells me that they sell their olives to the wholesaler (who then sells to the italian), for a misery. But as usual, "every Greek wants to be on its own", so they can't have the local agricultural association say "wait, why not put ourselves the olives in a plastic box with salted water and export them?". He says, "because most are just happy to earn what they used to earn all these years, it's like they are accustomed to the situation"...
Here's another for you Mr. Kastner. After the "River", formed as a substitute to cover PASOK's collapse and eat into SYRIZA's votes, now we have a new party to the right of ND, a true ND subsidiary! The "Roots" party...
ReplyDeleteIt's going to be founded by Baltakos. Baltakos has been the closest Samaras' friend for 25 years and was secretary of the goverment. He was forced to resign, after this video came out (hidden camera)
https://www.youtube.com/watch?v=TsntrUzQ7YY
Where he speaks with a Golden Dawm MP and admits that the judges had no evidence and the persecution against Golden Dawn is politically motivated because it cuts votes from New Democracy. He was also acting as liaison between ND and Golden Dawn to coordinate in some votes.
Now, Baltakos announced the foundation of the "Roots" party is imminent. A party of the right, around army and police personnel and orthodoxy.
Baltakos live on TV, admitted today that more or less, this will be a subsidiary party of ND, with more anti-memorandum position, in order to gather the votes that leak towards Golden Dawn and angered right wing voters that being anti-memorandum, seek refuge to SYRIZA.
"Because of the circumstances and the partecipation in coalition goverment, New Democracy has no choice but to move towards the center, losing its right wing", adding "Samaras can't do anything about that".
He continues: "My opinion is that before last Christmas, we should have turned, at least on comunication level, against the troika. I mean, from the moment that we had achieved a primary surplus. Because the parties that are on the right of New Democracy have all anti-memorandum rhetoric. When we insisted on pro-memorandum rhetoric, we lost votes to our right, with result, that we couldn't catch up to SYRIZA any more. I mean, the gap that there is now between ND and SYRIZA is due to the fact that we have lost our right wing. There are people who belong to our political area and since they don't want to vote for party A or B (my note: he means Golden Dawn and ANEL), they think to vote SYRIZA. We don't like this.
http://www.protothema.gr/politics/article/430806/o-baltakos-proaniggeile-tin-idrusi-neou-kommatos/
One this is for sure, you don't get this level of candid speech in other countries. The man, who is also a lawyer, goes on tv and openly says: "We will open a subsidiary of ND with anti-memorandum positions on paper, because we need to cut votes from SYRIZA". Even for Greece, where everything is common secret, this is too truthful to pass unnoticed.
Had this been in a northern country, he would have invented a whole scenario of "how the country needs a pure right party, with new ideas, we have a plan, come vote us"...
what does this have to do with olive oil?
DeleteV
Below are a couple of interesting links on the subject:
ReplyDeletehttp://ec.europa.eu/agriculture/olive-oil/economic-analysis_en.pdf
http://ec.europa.eu/agriculture/markets-and-prices/market-briefs/pdf/02_en.pdf
Thank You For the Docs Mr. Kastner,
ReplyDeleteIn reply to all of my positively thinking compatriats i would like to give some thoughts.
In my studies of olive oil aside from commercial aspects in an article which I read (which I can not find because i have over 2000 documents on olive oil) Greece was the 3rd or 4th global producer of olive oil. And yes, Italy, Spain and Tunisia may have the hectares and declared trees which grants them 1st places in global producers, you all know that in Greece, what is declared and what is real is quite grey. To be honest I would be as bold as to say that we are the Number 1 producer of olive oil. More than half of it going to Italy on the black market and the the other 3rd legally. But let's not talk garbage.
Statistically we are number 3 or 4 on the global market. You know what is important my compatriats. WE ARE NUMBE 1 IN GLOBAL PRODUCER IN EXTRA VIRGIN OLIVE OIL. We produce on avergae annuam 70% of the global extra virgin olive oil. Sorry to be graphic but we simply fart and we have 0,1 acidity. If we take some added precautions to protect our trees we have great output as well. Our land is blessed. Leanr to use it and it is not so bad to get out of the suit and office and get your hands dirty.
Now you mention commercialization etc. Yes the Italian have taken the markets. Ok. Who gave it to them. We did. We can take it back. Italians are nothing without our olive oil. Spanish are nowhere to be found on the map as far as quality and Tunisian oil might as well be corn oil. We have the best oil and the creme de la creme of the best oil. If we choose to use it we will simply be empowered. If you choose to sit behind legislature and not find means to break boundaries, then you do not deserve to have anything.
To be honest it is quite tiresome to hear on countless comments on this blog the " *ussy " attitude. Where are your guts and drive to succeed? Where is the greek heroism to OVERCOME and beat the *hit out of everyone who threatens us (so to say.).
Just because the Eu mandates, Italian commercial giants control markets, and you are not making barely any profit does not mean you can not succeed. Always remember the larger they are the harder they fall.
For olive oil, there are countless accounts of greek exporting, luxurious olive oil to niche markets. Mass market is garbage anyway. Who cares if Italy has the mass market. Let them have it with thir garbage oil. We have the quality and we simply need to create the value added. People are not aware that 3,00 euro liter olive oil is simple a ratio mixture of greek 0,2 acidity olive oil with 50% 20,0 acidity Italian olive oil. A correct price for extra virgin cold pressed oil at 500ml goes for 10 - 40 euro not including shipping. Depends on how you market it.
Where I have my fields I will reach my goal and i will accomplish it and I will assure that any of my local compatriats interested in coming into exporting with me will be welcome. I will succeed. All the negative people can go sit on their couch and complain that the government does nothing for them.
The above bring me to one my favorite quotes and leaders of all time.
JFK.
Ask not what your country can do for you, ask what you can do for your country.
My reply is i will succeed, create jobs, create value, pay taxes and help anybody willing to follow me.
V
A comment which a reader sent my via email: "More important than the labels (Virgin, Extra Virgin) is the level of acidity. Any acidity higher than 0.4% or 0.5% should not be consumed and if it does not show any acidity ranking, forget it altogether".
ReplyDeletePartially True,
DeleteConsumption of virgin oil which is 2% can be had. There are many olive oils which are even higher, but these oils are far more superior to be consumed when in cooking food. High acidic olive oil is far much better than corn, sunflower and other seed oils in cooking food. The molecular threshold of olive oil is much more dense allowing it to withstand high temperatures repeatedly. It is why even some fast food chains are using olive oil for deep fried foods. Healthier and more economical for these businesses.
High acidity oil in its raw form is what should be avoided. Ideally only extra virgin or freshly pressed oil is ideal for salads. Not only is it pure and healthy, it increasing HDL while reducing LDL, it gives the necessary body fats needed for energy in a day. I think 0,4 - 0,5 acidic level for raw consumption is an extremity. Below 1,5% if fine if it is not a mixture of oils. Unfortunately, most consumers can undestand this from the taste. Most Mediteraneans do understand after so many generations of coultivation and consumption. Proper labeling and certificates stated on bottles prove the quality of a good olive oil. Usually the price follows and is higher.
How can i get your email?
Sincerely,
V
Here is another comment from this reader who lives in Canada:
DeleteIn any event, my Missus has prepared "Chile con Carne" for tonight's dinner and told me that I must walk across the street (minus 5 degrees without counting the windchill factor) and buy us a head of lettuce for the salad. So I did and thanks to your posting I walked around the isles and, to my enormous surprise, here was an entire stand of one litre of Italian Virgin and Extra Virgin Olive Oil for CAD$4.99 which is about Euro 2.5, maximum Euro 3. Ridiculous!... Even my humble Italian barber of the last 30 years tells me that a good bottle of olive oil in Italy costs Euro 15 nowadays and here in Canada it goes for almost nothing...after shipping, tariffs and all since the FTA between Canada and the EU is still not reality.
In short, there is a faulty logic somewhere here, which incidentally occurs even with close members of my family back in Portugal, where they claim that the "garbage" olive oil is OK for making soups and cooking but not for salads which falls in line with your commentator. So, it serves little purpose for me to enter into a polemic with your commentator but I do reiterate that you, your good wife and all those I care for ought to look at the acidity IF disclosed and avoid the product IF undisclosed, which is what I saw in the supermarket almost across the street from where we live".
You find my email in my profile.
Who cares about the price or quality of greek olive oil? Greece is only into the "production" for the CAP subsidies.
ReplyDeleteBerliner
Can someone tell me what is the CAP subsidy in Greece at present?
ReplyDelete