Deoleo Alerts U.S. Consumers of Tariff-Driven Olive Oil Crisis

In a recent statement, Cristóbal Valdés, CEO of Deoleo, the world's largest olive oil producer, warned that American consumers may face significant price increases and limited access to olive oil due to a proposed 30% tariff on European Union (EU) imports by the Trump administration. This tariff, set to take effect on August 1, marks a drastic increase from the current 10% duty and threatens to exacerbate the challenges faced by consumers who rely heavily on imported olive oil. Approximately 95% of the olive oil consumed in the United States is sourced from abroad, primarily the EU, which dominates the global olive oil market.

The European Union is not only the leading producer but also the primary exporter of olive oil, with Spain being the largest contributor. According to the American Olive Oil Producers Association, only about 40,000 acres of olives are cultivated in the U.S. for olive oil production, compared to the EU's extensive 4 million hectares dedicated to olive cultivation. This imbalance raises concerns about the impact of tariffs on U.S. consumers, as Deoleo generates more than 25% of its total revenue from the American market.

Valdés emphasized the need for increased communication and consumer awareness regarding the health benefits of olive oil, particularly with the company's flagship brand, Bertolli, which represents a trusted choice among American consumers. 'Beyond institutional dialogue, we are strengthening our value proposition in the U.S. through consumer awareness campaigns about the benefits of olive oil,' he stated in an email to CNBC.

The potential tariff implications extend beyond olive oil. Analysts at commodity data firm Expana have warned that a reduction in U.S. olive oil imports could lead to serious repercussions for the global market, including a supply glut in the EU that may result in downward price pressure and intensified competition among producers. The ripple effect of such tariffs could impact other sectors as well, with producers of Irish whiskey, Italian cheese, and French wine expressing similar concerns.

The EU has been actively pursuing a trade deal with the U.S. to mitigate the impact of these tariffs. However, with the deadline approaching, uncertainty looms over whether an agreement can be reached. The prospect of countermeasures from the EU remains on the table as both sides navigate these trade tensions.

In light of these developments, the olive oil industry is bracing for potential disruptions. Deoleo's proactive measures, including logistics and supply chain improvements, aim to adapt to the changing market conditions while prioritizing consumer access to olive oil—a staple in many American households. Valdés concluded, 'Access to olive oil should not be penalized; it should be promoted.' This sentiment reflects a broader desire within the industry to ensure that consumers continue to enjoy the benefits of what many refer to as 'liquid gold.'

As the situation unfolds, stakeholders will be closely monitoring the effects of these tariffs on both the U.S. consumer market and the global olive oil supply chain, which is heavily reliant on European production.