Recently, the government signaled an intention to apply zero VAT on olive oil starting this July. Facua, a consumer rights organization, expressed strong disagreement with the move. The association said it does not back the measure, did not request it, and believes it serves to mask the government’s inaction in the face of substantial, illegal price increases seen over the past year and a half at olive oil margins. This summary came from Facua’s secretary general shortly after the news circulated.
Facua’s spokesperson explained that concerns have been building for months about price hikes that seem to reflect disproportionately large profit margins. As evidence, the secretary general pointed to a gap between price increases at the origin of the product and the much larger rises observed at the point of sale. Between January 2023 and June 2024, olive oil price at origin rose by 2.45 euros per liter, while at retail, the price climbed by 6.7 euros per liter over the same period, illustrating a marked escalation in margins, according to the association. [Cited from Facua]
“The upward shift at the sale point is exceptionally large compared with the origin price, nearly tripling the growth seen at origin; there is no justification, only rising margins”, said Sánchez, the secretary general, calling the data devastating in its impact. [Cited from Facua]
What especially unsettles the group is the sense that both supermarkets and the oil industry have not faced any consequences for such pricing practices. Sánchez criticized Luis Planas, the minister of Agriculture, Fisheries and Food, for acting as if the chains control prices and for repeatedly applauding the efforts to push prices down. He also criticized Alberto Garzón, the former Minister of Consumption, for saying that his department lacks the authority to intervene in matters like these, and Alberto Bustinduy, who succeeded him, for not making public any conclusions after acknowledging that the department did indeed have the power to sanction illegal price increases at the point of sale. [Cited from Facua]
Additionally, the group accused the National Commission on Markets and Competition (CNMC) and, more broadly, all autonomous communities of inaction. The demand is not merely to monitor the market or penalize those inflating margins; Facua called for a price intervention and the enforcement of the 1996 Trade Law, supported across political spectrums at the time. The association argued that the government has the ability to intervene in market conditions when necessary. In Sánchez’s view, the price of a liter of extra virgin olive oil rising from under 7 euros on average to over 13 euros demonstrates the need for action. He warned against accepting claims that cutting VAT by five points would solve the issue, labeling such assertions as misleading and a sign of inaction that should be addressed directly. [Cited from Facua]