Olive oil producers must withdraw stocks or divert to non-food use

The Ministry of Agriculture, Fisheries and Food has issued Order APA/1145/2026, of October 29, which establishes the marketing rules for olive oil for the 2026/2027 campaign. This measure is triggered by the high probability of an oversupply resulting from favorable weather conditions in early 2026, which are expected to produce a harvest significantly above historical averages.

What changes

The primary change introduced by this Order is the activation of market stabilization mechanisms to prevent a collapse in prices due to excessive supply. Under the provisions of this regulation, the Ministry has the authority to implement two main types of measures: the withdrawal of olive oil from the market until the subsequent campaign and/or the diversion of the product to non-food uses. These measures are not automatic but depend on the actual market conditions observed in the coming months.

According to Article 8, affected operators are legally obligated to store the specific quantity of oil resulting from the percentage determined by the administration. This storage must be reflected in the monthly declarations within the Olive Oil Market Information System (SIMO), as required by Royal Decree 861/2018. Furthermore, Article 9 specifies that the exact start date and the precise percentage of the harvest to be withdrawn will be officially established via a Resolution from the Directorate General for Agricultural Productions and Markets, which must be published no later than November 15, 2026.

Regarding enforcement, Article 10 mandates that the Autonomous Communities are responsible for conducting official controls to ensure compliance. Finally, Article 12 establishes that any breach of these marketing rules will be punished under the sanctioning regime set forth in Law 30/2022, which regulates the management of the Common Agricultural Policy (CAP) and related matters.

Context

This Order is not an isolated measure but is enacted in accordance with Royal Decree 84/2021, which provides the basic rules for applying Article 167 bis of Regulation (EU) No 1308/2013 of the European Parliament and of the Council. This European regulation allows Member States to establish marketing rules to improve and stabilize the functioning of the common market for olive oils and olives. The objective is to regulate supply without fixing prices or blocking excessive percentages of the normally available production.

The legal framework relies heavily on the information provided by the SIMO system, established by Royal Decree 861/2018. This system ensures that the Ministry has the necessary data on production and stocks to make informed decisions. By implementing this Order, the Spanish administration is exercising its competence to coordinate economic activity and ensure market stability, following the principles of necessity and proportionality required by administrative law.

Who is affected and how

Olive oil producers and mill owners: This group faces the most direct operational impact. If the Ministry determines that a withdrawal is necessary, producers will be forced to withhold a portion of their production from the commercial market. This means they must have the physical capacity to store the oil and the administrative discipline to report it correctly in their monthly SIMO declarations (Art. 8). Failure to comply with these storage or reporting obligations could lead to significant sanctions under Law 30/2022.

Commercializers and distributors: Companies involved in the trade of olive oil must prepare for potential supply fluctuations. While the measures aim to stabilize prices, they also introduce uncertainty regarding the volume of food-grade olive oil available in the market. Distributors must monitor the official resolutions issued by the Directorate General to adjust their procurement strategies and inventory management.

Autonomous Communities: The regional administrations are tasked with the execution and oversight of these rules. They must coordinate with the Ministry to implement a control plan (Art. 10) and ensure that all operators within their jurisdiction are complying with the storage and non-food use mandates.

What to do and when

This regulation introduces specific monitoring requirements and potential obligations for the sector. Stakeholders should adhere to the following timeline:

• Before November 15, 2026: Operators must closely monitor the official communications from the Directorate General for Agricultural Productions and Markets. A Resolution will be published by this date defining the exact percentages of product to be withdrawn and the official start date of the measure (Art. 9).
• During the 2026/2027 campaign: If the Resolution is published, producers must immediately implement the storage protocols. This includes ensuring that the withdrawn oil is correctly accounted for in the monthly SIMO declarations to avoid sanctions under the Law 30/2022 regime (Art. 8 and Art. 12).
• After December 31, 2026: The Ministry will conduct an evaluation of the market's impact. Based on production estimates and market prices, the administration may decide to adjust the quantity of product to be withdrawn through a new Resolution (Art. 11).

We recommend that all affected entities consult with the specialized legal and tax departments at BMC to evaluate the impact of these potential market interventions on their specific business models and compliance protocols.