Why is Italian olive oil more expensive at source than Spanish olive oil?

Olive Oil Prices in Spain and Italy

Extra virgin olive oil (EVOO) prices in Spain (around €4/kg) and Italy (no less than €9/kg). Here are some reasons:

Production and Demand

Spain: High production (estimated at 1.3 million tons), far exceeding domestic consumption (less than 500,000 tons), making it a net exporter. This large supply exerts downward pressure on prices.

Italy: Low production (around 200,000 tons), far below domestic demand and exports, resulting in limited supply and high prices. In fact, Italy needs to import a large portion of the oil it consumes. This shortage, combined with constant demand, drives prices up.

Product Valuation and “Country Brand”

Italy: The Italian consumer values ​​”Made in Italy” products and is willing to pay more for them. There is a strong identification with Italian quality, tradition, and excellence. The “Italy” brand itself is an added value.

Spain: The Spanish consumer, in general, does not perceive the same value in Spanish olive oil and is unwilling to pay such high prices.

There is also a lack of an effective promotional strategy and a questioning of the work of Spanish producers, which damages the image of Spanish EVOO. It is therefore necessary to professionalize the sector and highlight the quality of Spanish products.

Current Factors

The 2024/25 campaign is characterized by a poor harvest in Italy, exacerbating the price gap. Furthermore, in Spain, the rapid harvest and large initial supply led to a sharp drop in prices in early December, accompanied by price volatility in Spain and a lack of organization in the sector.

Production Costs and Policies

Production costs in Italy are generally higher than in Spain, which also influences final prices.

Differences in agricultural policies, subsidies, and regulations between the two countries also have an impact on costs and prices.

Market Strategies

Italy has historically relied on brand-centered communication focused on “100% Italian Olive Oil,” differentiating itself from the rest of the world. Spain should focus on the “Olive Oil from Spain” brand to highlight the quality of its product.

Therefore, it is necessary for Spain to evolve from a volume-focused sector to one where consumers value olive oil for its attributes of quality, transparency, traceability, innovation, and sustainability.

Other Factors

The influence of harvest forecasts in other Mediterranean countries, such as Tunisia and Turkey, also influences the price drop in Spain and Portugal.

It should be noted that the price difference is specifically for 100% Italian EVOO, while oils imported by Italy have prices more aligned with the global market.

The atomization of the production sector in Spain and individual sales decisions by farmers also influence price volatility.

In summary, the price difference between Spanish and Italian EVOO is due to a combination of structural factors (production, demand, product valuation) and circumstantial factors (low harvest in Italy, rapid harvest in Spain). It is also necessary for the Spanish olive oil sector to improve its promotional strategy, focus on quality and differentiation, and become more organized to better defend the value of its product. It is important to learn from the Italian model regarding the valorization of origin and the creation of a strong country brand.