Photo: Pixabay

Spanish rush to Portugal to buy cheaper olive oil

A litre of olive oil costs 27% more in Spain than in Portugal

While for years Portuguese citizens living closer to the border have travelled to Spain to fill up their car tanks due to substantially lower fuel prices, it seems Spanish are now doing the same … but for olive oil.

This is a tendency that is not unheard of but has been growing significantly in the past month, reported Spanish newspaper El País last weekend.

The report cites an employee from a Pingo Doce supermarket in Miranda do Douro, Bragança, who said: “The Spanish already bought olive oil in bulk, but it seems like they’ve started drinking it in the last month.”

Meanwhile, in Valença do Minho on the border with the Spanish region of Galicia, the manager of another Portuguese supermarket chain (Continente) said that 90% of their Spanish customers come to the supermarket for olive oil.

According to the newspaper, Spanish customers are trying to escape a price increase of more than 50% in olive oil in their country. The increase is mostly due to drought affecting the Andalusian olive oil-producing regions, although Spanish consumer protection associations reportedly suspect speculation may be involved. The price of olive oil is being monitored by the National Commission for Markets and Competition, El País adds.

The newspaper also cites a study by consumer association OCU, which reports that a litre of olive oil costs 27% more in Spain than in Portugal. While the zero VAT rate which started being charged on several ‘essential items’ in Portugal (Spain charges a 5% VAT rate on olive oil) may partially explain this difference, another reason offered is the different consumption patterns in the two countries. Spaniards consume an average of 11 to 12 litres of olive oil per person per year, while Portugal consumes seven litres. According to the paper, lower consumption may explain why Portugal, which has become self-sufficient in olive oil, is less affected or takes longer to be affected by rising prices.

On the other hand, the irrigation system of Alqueva, around which a significant portion of Portuguese olive oil is produced, has allowed local producers to resist the extreme drought affecting Spain.

However, there are warnings that the high prices practiced in Spain will spread to Portugal soon. Mariana Matos, Secretary-General of Casa do Azeite, a private association that packages and sells the product, recently admitted that the price could reach €10 per litre by the end of the year.

By Michael Bruxo

[email protected]