Supermarkets have recently implemented a significant reduction in the price of olive oil in June, just before the VAT on this product is set to be abolished between July 1st and September 30th. Following this, the VAT will increase to 2% and then to 4% from January onwards, in accordance with the Government’s anti-crisis decree.
During June, leading supermarkets such as Mercadona, Carrefour, Dia, and Alcampo saw a decrease in the price of a liter bottle of extra virgin olive oil to six-month lows. It remains uncertain if this price reduction will be a long-term trend, but it is expected that an additional reduction of around 50 cents per liter will take effect starting today.
The price of distributor brand extra virgin olive oil dropped to 9.65 euros in Mercadona, Carrefour, Dia, and Alcampo in June, compared to 9.90 euros it had been priced at since January. This price reduction stood out from the consistent price increases seen earlier in the year, leading to speculations of price fixing among consumer associations.
Despite most supermarkets lowering their olive oil prices in June, The English Court maintained its price per liter at 9.90 euros, showing a deviation from the general trend. Market analysts attribute this price drop to falling wholesale prices due to a better-than-expected harvest.
While wholesale olive oil prices have not seen significant fluctuations at the origin level, the market is expected to see further price reductions with VAT set to be abolished. The abolition of VAT is seen as an opportunity to promote the consumption of a basic product like olive oil.
Overall, the average cost of a basic shopping basket decreased by 1.11% in June compared to the previous month, with Carrefour offering significant discounts. Despite this decrease, the overall cost of the basket remains higher compared to January 2023 when the VAT reduction was first implemented.