Escalating Costs of Essential European Food Items Persist

3

Before you generously drizzle olive oil over your dishes, pause to consider its surging cost.

As a fundamental ingredient in Mediterranean diets and a frequent addition to salads across Europe, olive oil is now a prime illustration of a commodity whose price increases continue to outpace the general rate of inflation within the European Union.

Since January 2021, the cost of olive oil has surged by approximately 75%, overshadowing the general annual inflation rate, which itself has been alarmingly high in recent years, reaching 11.5% in October of the previous year. Notably, a significant portion of the food price inflation has occurred within the last two years.

In Spain, which leads the world in olive oil production, there was a 53% price hike in August over the previous year, culminating in a staggering 115% increase since August 2021.

Eurostat, the statistical office of the European Union, has noted that the price of potatoes, another basic food item, has also seen a remarkable increase. By September 2023, the cost of potatoes had escalated by 53% since January 2021.

While families with higher and middle incomes may be able to withstand such price hikes with relative ease, they pose an increasingly heavy strain on lower-income households. These groups have often seen their wages stagnate, unable to keep pace with the inflationary trend.

The European Trade Union Confederation (ETUC) highlights that nominal wages in the EU have risen by only 11%, exacerbating the disparity between earnings and living costs.

“Nominal wages continue to lag behind the rising costs of basic groceries, even for those employed in the agricultural sector, driving a growing number of workers to depend on food banks,” states Esther Lynch, ETUC’s general secretary.

Although the annual inflation rate decreased significantly to 2.9% in October, marking the lowest in over two years, food inflation remained high at 7.5%.

The increase in grocery prices in Europe has been more pronounced than in other developed economies, ranging from the United States to Japan. This surge is attributed to escalated energy and labor expenses and the repercussions of the conflict in Ukraine, despite a decline in food commodity costs for consecutive months.

While the ETUC accuses large agricultural industries of profiteering during these challenging times, the olive oil industry has encountered distinct difficulties.

In Spain, farmers and industry specialists attribute the soaring prices primarily to the near two-year drought and rising temperatures which affect crop flowering, along with inflation impacting fertilizer costs. The Spanish Agriculture Ministry forecasts that the olive oil yield for the 2023-24 season will be about 35% below the average of the last four years.

---

This report has received additional contributions from Ciarán Giles in Madrid.

Frequently Asked Questions (FAQs) about food price inflation europe

More about food price inflation europe

• Eurostat – Potato and Olive Oil Price Statistics
• ETUC on Wages and the Cost of Living
• Inflation Rates in the European Union
• Impact of Climate on Agriculture in Spain
• EU Food Market Overview