Distribution strategies in the value chain of Spanish virgin olive oils

Abstract

In Spain, the world’s leading olive oil producing country, the existing literature points to a malfunctioning of the value chain, since it hardly generates any profits and some links often incur losses. The aim of this research paper is to analyze the value chain of virgin olive oils, establishing the relationship between the prices of virgin olive oils at origin and the retail prices paid by the end consumer. The methodology used is the analysis of the value chain using quantitative research through descriptive statistics and the process of quantitative data collection under observation together with other statistical methods. The data on retail prices have been obtained from the published information of the commercial operations of the retailers themselves, while the data on prices at origin come from the price statistics elaborated by national (Spain) and international (European Commission) organizations. The conclusions point out that the retail price of virgin olive oils by the distributors does not reflect the real production cost of the product, as it is more a concept of customer attraction strategy on the part of the distributors.