Smaller olive oil producers in Australia facing strong competitive pressures

Posted by AFN Staff Writers on 2nd August 2012

Some of Australia’s best-known olive oil producers have revealed that pressures from the high Australian dollar, adverse weather conditions and aggressive pricing of major marketers, are all impacting on their profitability.

Western Australia’s Frankland River Olive Company has said in its latest report to the Australian Securities Exchange (ASX) that domestic packaged sales in the June 2012 quarter were less than the previous year.

“This is a result of aggressive pricing from some of the major marketers of Australian extra virgin olive, as well as imports of extra virgin olive oil benefiting from the high Australian dollar,” the announcement from the company said.

Meanwhile, a competitor, Red Island, said its olive harvest was lower than in previous years, the second disappointing season in row for the industry.

Red Island told the ASX of its own confidence that 2013 would see a return to normal climatic conditions, resulting in significant increases in the 2013 harvest, and that its olive oils and packaged products continued to gain market share in Australia’s principal supermarkets.

In its latest update to the ASX Red Island also reported “we are mindful that the imported competition continues to be advantaged by low bulk prices and continued strength of the Australian dollar.”

The Australian Olive Association meanwhile says both domestic and export market conditions remain difficult for Australian olive producers, with the high Australian dollar “making imported olive products correspondingly cheaper, as well as pricing Australian olive products out of export markets.”