This is how it has evolved and this is how it will remain after the elimination of VAT on July 1
Last Thursday, June 20, the Government announced its decision to eliminate VAT on olive oil after months of negotiations. With its approval, which is part of the portfolio of anti-crisis measures that have been approved since 2022 to alleviate the effects of Ukraine and inflation, this product will structurally form part of the goods and services that already apply a super-reduced VAT.
How has the evolution of olive oil been?
According to data from the National Institute of Statistics (INE) from the CPI, Olive oil was 68.1% more expensive in April than a year beforeand accumulates a rebound of 204.8% since January 2021, which means that its cost has tripled in the last three years.
Specifically, white label mild olive oil experienced a 225% increase: It went from 2.35 euros on average in December 2020 to 7.66 euros in December 2023, according to the OCU.
In fact, a study by the same organization on the evolution of the online price of this product since December 2024 in six supermarket chains reveals that Its price has continued to rise between 7% and 23% depending on the type of oil.
How much has oil risen since 2023?
Prices have continued to rise during the first quarter of 2024. This is demonstrated by the OCU “Price Observatory”, in which they have analyzed 1 liter PET plastic bottles:
- Bottle of EVOO (extra virgin olive oil) from a manufacturer’s brand that is very widespread in supermarkets.
- White label or distributor EVOO bottle.
- Bottle of soft private label olive oil.
This analysis shows that in private label EVOO the average increase has been 7% in the first months of this year and the average price of this product in the supermarkets analyzed has went from 9.20 to 9.84 euros in the month of April.
For its part, the manufacturer’s brand EVOO, The average price has increased by 23% on average and has gone from 12.67 to 15.33 euros, while private label mild olive oil has increased by 21% in the first quarter of 2024, increasing the average price per liter from 7.6 to 9.21 euros. The main price increases in this product (1l soft oil in PET bottle) have been observed in El Corte Inglés, Carrefour and Alcampo.
How will prices be after the VAT is imposed?
The elimination of VAT on olive oil means that consumers will not have to pay the 5% tax that was applied until now to this product from next July 1.
This will mean that olive oil is 5% cheaper. In a practical example, a bottle that until now cost 10 euros with VAT, should now cost 9.50 euros. Here are some examples applied to supermarkets:
- In Mercadonawhere currently the one-liter bottle of Hacendado brand extra virgin olive oil has a price of 9.65 euros, as of July 1, the price of this bottle of oil will be 9.16 euros.
- At Lidl The price of its liter bottles of olive oil is currently 7.99 euros, so, after the elimination of VAT, the cost will be 7.59 euros.
