Agrokor, a Croatian food and retail concern, is planning to close up to 100 of its Konzum grocery stores, which could affect regional olive oil prices and cut its olive oil production.
The retail giant, whose revenue represented 15% of Croatia’s GDP, was struggling with nearly US$6bn of debt, wrote the Olive Oil Times on 5 July.
Agrokor owned the Ol Istria and K Plus olive oil brands and was a major buyer and seller of olive oil, sourcing its oil from both Croatia and the EU.
The company owned at least 65,000 olive trees on the Istrian Peninsula and produced 130 tonnes/year of extra virgin olive oil through its Agrolaguna subsidiary, Olive Oil Times said.
Croatia produces less than 6,000 tonnes/year of olive oil, based on International Olive Oil Council data, but disruption in any of the former Yugoslavian countries could impact the global market, which already suffered failed harvests in 2016.
Now some of Agrokor’s suppliers had begun to demand early payment or to withhold product deliveries until compensated due to concerns over the company’s ability to meet its liabilities.
Olive Oil Times said the Croatian government had appointed a crisis manager to ensure Agrokor repaid its debts and restructured itself as it considered the company “too large to fail” due to its significant contribution to the Croatian economy.
The company recently secured a US$535M loan to help avoid bankruptcy and repay creditors but that may have been a temporary fix due to competitors pushing into the Croatian market, wrote Olive Oil Times.