Next year, the market for extra virgin olive oil in Spain will experience a significant change due to the increase in VAT, which will go from 2% to 4%. This measure, recently announced by the government, has generated a mix of opinions and reactions among producers, consumers and experts in the sector.

Context and Reasons for the Change

The government has justified this decision as part of a broader strategy to harmonize the taxation of food products. The increase in VAT aims to equate the tax treatment of extra virgin olive oil with that of other essential food products, while contributing to increasing the tax revenues needed to finance social and sustainability programs. You can read more about the government’s tax policy.

Impact on Producers

For producers of extra virgin olive oil, this tax change represents a new challenge. Many are wondering how this will affect their competitiveness in the national and international market. In a sector already affected by price fluctuations and climatic challenges, the increase in VAT could translate into higher costs for producers, who will have to decide whether to assume the additional cost or pass it on to consumers.

Consumer Reactions

Consumers are also paying attention to this change. Extra virgin olive oil is a fundamental pillar of the Mediterranean diet and a key product in many Spanish kitchens. The increase in VAT could lead to an increase in the final price of the product, affecting household consumption habits. Some experts foresee a possible adjustment in demand, although it is likely that many consumers will continue to prioritize the quality and health benefits of extra virgin olive oil.

Future Outlook

In the long term, the extra virgin olive oil industry will have to adapt to this new tax environment. Producers are exploring ways to streamline their processes and improve efficiency to mitigate the impact of the VAT increase. In addition, opportunities are being sought to educate consumers about the benefits and value of extra virgin olive oil, with the aim of maintaining their preference despite the price increase.

This change in VAT could also drive a greater emphasis on innovation and sustainability within the sector. Producers are evaluating new strategies to improve product quality and reduce costs, with a focus on environmental sustainability.

In summary, the increase in VAT to 4% on extra virgin olive oil from 1 January 2025 represents a significant challenge for all players in the sector, but it can also be an opportunity for innovation and continuous improvement. Only time will tell how the industry will adapt to this new fiscal reality.

La Gaeta Brand Implementation of Change

The La Gaeta brand, known for its production of extra virgin olive oil of the Empeltre and Arbequina varieties, is preparing to face the increase in VAT to 4%. The company has decided to optimize its production processes and look for ways to remain competitive in the market without compromising the quality of its products.

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