Greece’s Lost Olive Oil: How Export Barriers Stifle Economic Growth
AUDIE CORNISH, HOST:
China became a world economic power through exports – making products people in other countries want. It was a sure path to prosperity and a globalized economy. So if that’s the case, why isn’t Greece exporting its way out of its current economic crisis? Robert Smith from our PLANET MONEY team takes a look.
ROBERT SMITH, BYLINE: Greece has trouble exporting even simple stuff. The Greek yogurt – probably not Greek. Feta cheese – Greece doesn’t make most of it. And olive oil – olive oil, the liquid that made Greece – well, that story is an outrage around here. I’m in the hills of Kalamata, Greece, and they’re filled with hundred-year-old trees. They have these bright green olives that you just want to pluck and put into your mouth.
FOFI NIKOLAIDES: It’s very better.
SMITH: Yeah. I should’ve listened. It’s not – oh. Ok. It’s bad.
You apparently have to wash them and press them. And when you do, Fofi Nikolaides says the oil is almost florescent green. Fofi inherited the groves from her grandparents. With her and the rest of the Kalamata producers, Greece has become the third largest olive oil producer in the world. So why isn’t it on every grocery shelf? I went down to the factory where they press the olives to find out why. The owner is Demetrious Carrubalis.
DEMETRIOUS CARRUBALIS: Carrubalis.
CARRUBALIS: It’s a Greek name (laughter).
>>And he says during harvest season, these big tanker trucks line up down the road to take away the oil.
CARRUBALIS: 150 trucks, every day.
SMITH: So 150 tanker trucks are driving out of this region, out of Kalamata.
CARRUBALIS: From Kalamata.
SMITH: And the trucks drive straight from here on to a ship bound for Italy.
CARRUBALIS: (Unintelligible). Only Italy.
SMITH: The Italians buy Greek olive oil in bulk. They put it in Italian bottles. They slap on Italian labels, and they sell it for far more money than the Greeks make selling it in bulk. You’ve probably tasted Greek olive oil. You just didn’t know it. Greece never invested in the big processing and bottling and storage facilities you need to be a world competitor in olive oil.
NIKOLAIDES: It was not planning for the future.
SMITH: Fofi and her brother Vassilis said, enough. They wanted their grandparents’ olive oil in its own bottles. And so despite the financial crisis in Greece, they decided to create their own brand – Ladi Biosas. That’s the name on the bottle in Greek lettering so there is no mixing it up with that Italian stuff. The oil – the oil is the easy part. But being a small business, especially an export business right now in Greece, is almost impossible. Take the bottle. It’s gorgeous, square, like it holds perfume or bourbon. And they couldn’t find anyone in Greece to make this bottle.
NIKOLAIDES: In Greece, unfortunately, the glass industry is not growing.
SMITH: They had to have the bottle made in Italy. I know – humiliating. And because they’re in Greece, a country that people don’t trust financially, they have to pay the Italians upfront for every bottle, and they can’t get loans to help pay for it.
And then there’s the other persistent problem in Greece – taxes. Greece is in so much trouble right now that the government is planning something that would be unthinkable anywhere else. They’re asking businesses to pay next-years taxes this year. Literally estimate how much olive oil you will sell in 2016 and pay the tax now.
NIKOLAIDES: So that means we don’t have any money after that, any money to put into our production.
SMITH: Then Fofi tells me she shouldn’t complain so much. Greece was always hard – hard for her grandparents, hard for her parents, hard for her. She will grow this company, even without infrastructure, even without financing.
NIKOLAIDES: Everything is going to be from our own side. We’ll do everything ourselves.
SMITH: You hear this from a lot of businesses in Greece these days; fine – we will do it ourselves. But remember, in the rest of Europe, big and small companies get plenty of help from their governments. Italian olive oil – marketed out the wazoo. But Fofi’s oil, Ladi Biosas, is holding its own. It’s won some major awards. It’s in gourmet grocery stores in Europe and Canada, and it’s headed for the United States soon. You’ll know it. Right on the side, it says product of Greece. Robert Smith, NPR News, Athens.