Olive Oil. Prices rise for a reason, fall for a decision.
In 2022 a bottle of Filippo Berio cost 3.75. By last year it was 10.50. The drought is over and it is still 7.50.
THE GIST ON OLIVE OIL: "Olive Oil Prices"
What happened to the price of olive oil?
In 2022, a bottle of Filippo Berio olive oil cost £3.75. By the start of last year it was £10.50. The drought is over and Spain's harvest has recovered, and it's still £7.50.
Because prices go up for a reason, but they come down for a decision.
Why did it go up in the first place?
Spain grows most of the world's olive oil, and in 2022 and 2023 the harvest failed. Production dropped from 1.5 million tonnes to 666,000, and shelf prices in the UK went up by 47%.
Then it fixed itself. The yield went back up to 1.37 million tonnes and raw prices fell to their lowest since 2022.
Who kept the difference?
Filippo Berio cut its price, while charging the supermarkets twice. The UK CEO went on Sky News to say the supermarkets had kept the difference and, to put it plainly, taken us for mugs.
The official numbers back him up. Retail olive oil prices fell by 17%, but wholesale prices fell a lot more than that.
What did the supermarkets learn?
Supermarkets were surprised by how much we would put up with. The price ratcheted up and we still bought it, so they decided the price was fine and they'd keep the rest.
It's essentially an experiment in how much we'll pay, run by accident. No board on earth would sign off doubling the price of something to see what happens. But a bad harvest does it for you for free, and no supermarket is going to forget that. That's why nothing ever goes back to what it was.
Who is to blame for sticky prices?
Your take. One tap, then see how everyone else voted.
Quick answers
Why did olive oil prices rise?
In 2022 and 2023 Spain's harvest failed, with production dropping from 1.5 million tonnes to 666,000. Shelf prices in the UK rose 47%.
Why haven't prices fallen back?
Raw prices fell to their lowest since 2022, but retail prices fell only 17%. Filippo Berio's UK CEO said the supermarkets kept the difference.
What is Huw's take?
The bad harvest tested how much shoppers will pay, and no supermarket will forget it. Every crisis tests what you'll put up with.
See you on the next one.
What should the next one be? Suggest a topic for Huw to explain
The conversation
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