Filippo Berio has marked another “challenging year” as record olive oil inflation continued to weigh on profits.
A poor crop in Spain in 2022/23 triggered an olive oil shortage and “very significant price inflation”, said the olive oil supplier in its latest accounts.
This has caused a substantial decline in consumption in the UK, with Filippo Berio’s volumes down 20%.
While higher prices meant revenues grew 10% to £70.4m, a surge in costs weighed on pre-tax profits, which fell 13.5% to £3m.
“We’ve had two really challenging years because of the shortage of raw material,” said Walter Zanre, UK CEO. “We’re now coming into the other side of the cycle where price will probably start coming down. That has its own set of challenges.”
While new figures out this week show overall shop price deflation fell to 0.6% in September – the lowest rate in more than three years, according to the British Retail Consortium, olive oil remains largely unaffected.
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Olive oil is now more than £9.12 a litre on average – up 42% year on year, according to the latest figures from the Office for National Statistics.
Filippo Berio has invested heavily in advertising to try and maintain its market share, but said it recognised it would be a challenge to regain customers who had traded down to own-label, smaller bottles, or cheaper oils due to the high prices.
“The shoppers that have left the category… that’s a concern,” said Zanre. “I think you’ll start to see some [prices fall] on the retailer side around November or December. There’s going to be a big drop between now and next year but it’s probably going to happen in three or four stages.”
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