A study backed by the Universidad Internacional de Andalucía (UNIA) estimates that more than 600 olive oil mills across Spain and Portugal could close within the next decade. The research says 27% of the 2,219 mills in the Iberian Peninsula may be forced out of business amid mounting competitive pressures and declining profitability. A handful of major bottling and distribution groups increasingly dominate the sector, leaving smaller mills exposed to market volatility and rising costs.
Led by Juan Vilar and Sergio Caño, the study points to a critical imbalance: the number of mills remains high, but only a few large players control the downstream market. To achieve economic viability, mills must process at least 1.3 million additional kilos of olives annually. Fruit is limited, intensifying competition and often producing what the authors call 'sectoral natural selection', in which only the most efficient and largest mills endure.
Olive production has grown by just 15% over the past decade, far short of the 35% increase mills need to break even under current cost structures. The report notes that in Portugal, just eight mills handle nearly half of the country's olive crop, while some facilities in Spain process up to 60 times the national average. Of the total mills, 1,047 operate as cooperatives and are responsible for 40% of production; 1,172 are industrial mills, accounting for the remaining 60%. Unless mills consolidate or join larger cooperative groups such as DCOOP and Oleoestepa, or Jaéncoop, Interóleo and MIGASA, the study forecasts that 603 mills, 472 in Spain and 131 in Portugal, could disappear by 2036.
Cost pressures are mounting across the sector. The latest update from the Asociación Española de Municipios del Olivo (AEMO) says that, with average olive oil prices at €3.51 per kilo, more than 75% of Spain's olive-growing land is operating at a loss or on the brink of unviability. The pressure is especially acute in traditional and mountain olive groves, where mechanization is limited. Over the past six years, production costs have surged by 57%. Traditional, non-mechanized dryland groves face costs of €5.31 per kilo, while even the most efficient intensive and hedge systems now exceed €3 per kilo.
Industry leaders argue that traditional olive groves depend on differentiating and adding value to their extra virgin olive oil to secure prices at origin that keep farmers profitable. The oil's distinctive qualities are linked to Mediterranean diet benefits and environmental sustainability, while rural economies are also seen as basic to the groves' survival. This challenge reflects broader trends in Spanish agriculture, where small producers face increasing pressure to consolidate or modernize. In other sectors, such as housing and mortgages, market shifts have forced buyers to adapt to new financial realities.
Spain remains the world's largest olive oil producer, and the sector is critical to rural employment and exports. The squeeze on margins and the dominance of large market players may reshape olive oil production in the coming years, with impressive implications for traditional farming communities and the broader agri-food economy.
