Impact of Spanish big retailers’ strategies on Protected Designations of Origin of extra virgin olive

Abstract

Olive oil has traditionally been marketed in Spain, and as in many of the producing countries of the Mediterranean Basin, as a commodity good, except for some Italian and French regions where it is recognized by some segments of consumers as a differentiated good. Policies undertaken by abnormally low prices of the mass distribution firms have been used to increase the ability to attract consumers to the business signs. These strategies are based on using olive oil as an appealing product. This work aims at a comparative study of the pricing policy of the Retail distribution with average prices received by producers for the past two harvests, and analyse the effects on the valorisation of olive-oils with protected designations of origin. This retail distribution strategy extends back along the whole olive oil chain and especially to the producers, as the weakest link in the chain, who suffer the worst consequences of this general lack of profitability. As negative side effect, these retail strategies contribute to trivialize the consumer perception of olive oil as an undifferentiated product. This seriously damage the collective strategies based on distinctive signs of differential quality associated with territory, and in particular Protected designation of origin extra-virgin olive-oils. 1