Olive oil maker Filippo Berio faces price hike of 35 per cent: ‘If we don’t pass it on, we go bust’
Consumers could be hit with price hikes of up to 35 per cent on olive oil next year, the managing director of Filippo Berio told CityA.M.
Harvests in Spain have been impacted by a dry September, with worst-case scenario predictions that the crop could fall to the lowest level since 2012.
In Andalusia, a main olive-growing region in Spain, the local harvest could be 49 per cent smaller this year, and the second-smallest on record, the olive oil maker told this newspaper.
Inflation has added €30m to Filippo Berio’s cost base, with this sum still on the rise.
The company’s managing director, Walter Zanre, said consumers were yet to see the impact of a poor harvest on the supermarket shelves.
Some restaurants and other food businesses would be forced to swap out olive oil and use cheaper alternatives in recipes, such as sunflower oil, he said.
Shoppers may also opt to trade down or “completely” shun the product, he added.
It comes after research from market research firm Nielsen has already shown olive oil prices have rocketed around 20 per cent this year due to the intense inflationary environment.
When price rises are reflected on the shelves, Zanre warned his firm was “resigned to the fact” that sales would slow down, with there being “no question” that consumption would be impacted.
The level of cost pressures was not a simple two to three per cent that could be absorbed by the firm, he added. “If we don’t pass it on, we will simply go out of business,” the boss stressed.
A 500ml bottle of oil could rise from £5 to £6.50 next year, he said.
The situation was “unprecedented,” with businesses staring down the barrel of a “very challenging year” next year.
High prices meant a “perfect storm” for Filippo Berio, as cash-strapped consumers are also facing pressure when buying groceries.
There have also been concerning harvest projections for some other olive-growing nations, like Italy and Portugal.