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Such are the Gallegos, one of Spain’s wealthiest families, thanks to their shadow control of the world’s olive oil

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It was in the 1940s that Miguel Gallego and his wife, Dolores Jurado, decided to leave their city of Extremadura to start a new company in Seville, laying the foundations of a family business that their sons Miguel, Antonio , Diego and Francisco followed. From this project came Migasa, which today is the world’s leading group in the sale of olive oil, with 250,000 tons of olive oil, to which are added, among other food products, another 230,000 seeds. Turnover exceeds 1,000 million euros.

Being in the oil trade since childhood due to his father’s business, he took his first steps in this world by buying and renting oil mills in different provinces from Seville to Toledo. The first step in building the group was taken in the 1940s with the purchase of an olive oil based oil and soap factory in Torreblanca with a refinery and small bottling plant on Sevillian soil. This operation was followed in the 1950’s by the acquisition of an olive pomace oil refining company, complemented by the purchase of a new refinery.

Today the group has 19 industrial plants and is based in Dos Hermanas (Seville). It is the main Spanish company producing oil in the bulk segment. Migasa became the main supplier of olive and seed oils for both the largest and the small Spanish bottlers. Also for others based abroad, especially in Italy and Portugal. From a production of 250,000 tons of olive oil, about 150,000 tons are destined for export to more than a hundred countries, of which about 70,000 tons are packaged. In the domestic market, sales are divided into bulk, mainly for the food industry, from candy to canning; the oils packaged with own brands or affiliated brands thanks to agreements with other groups or distribution brands.

“There were a lot of small packers in all the towns in the olive growing areas and little by little they were closing, so we were running out of a lot of lifelong customers. In this context, we have decided to reverse and increase bottled oil operations with our brands and others on the basis of agreements,” says Antonio Gallego, Deputy General Manager of Migasa. The initial alliance was with the Ybarra Group for commercialization of packaging under its brand.To this decision in 2001 was added the purchase of La Masía, owned by the multinational Unilever.

The circumstances of the markets, with a strong offensive by the large distributors to belittle the oil or with cheap brands that affected the sales of the manufacturers, triggered Ybarra’s financial difficulties. Migasa came to his aid in 2009 in exchange for taking 50% of the company. And what had started as a strategic alliance gave way to the creation of a new company as Grupo Ybarra Alimentación, which meant that other products such as sauces, mayonnaise, vinegar, olives or canned vegetables were included in the activity.

In order to grow in sales of packaging with brands associated with the group, Migasa followed different strategies. In the case of Salgado, the brand joined the company at a time of financial difficulty. In others, collaboration agreements worked as with Mueloliva, Monterreal or Arteoliva for the marketing of gazpachos or the new line of gazpachos and salmorejos launched under the Artesur brand with the Realfooding label created by Huelva nutritionist Carlos Ríos for a healthy diet became.

White labeling is another of the most important activities. Today, in addition to promoting its own brands, the group remains a key supplier to oil packaging companies as well as a supplier to the food industry. Oil is its primary activity, accounting for more than 80% of its $1,000 million in sales. From a business point of view, the positions of responsibility at Migasa are distributed among the children and grandchildren of the founder. The second and third generations of a saga far removed from the wars that were common in family-owned food companies.

According to Antonio Gallego, the group’s investments in recent years, around 60 million euros, have gone into improving its facilities, from production to packaging. He points out that they do not have a written investment plan with a medium and long-term perspective, but that the whole family has a clear idea of ​​where to go: connected to the world of oil and to the more than 80,000 olive growers with whom it has commercial relationships. They don’t provide data on benefits. “Nor do we publish the financial ratings that those who are public are required to publish,” claims the manager.

The Gallegos are aware that they have sufficient resources to continue growing by buying other companies. They’re more keen on discreet shadow work as bulk carriers to build the current group than bragging about their success. According to the information, the family is one of the 100 largest fortunes in Spain forbes.

traditional olive grove

Migasa, together with the Lidl distribution group and the agricultural organization UPA, signed an agreement just over a year ago to support the survival of traditional olive groves against super-intensive farms, to give greater added value to their oil and also for its fundamental role in the care of the rural territory.

On an olive acreage of 2.7 million hectares, the traditional olive grove accounts for more than 60% of all the acreage, with a clear weighting of dry land and mountainous land, with quality productions and generally short compared to the intensively irrigated areas. This situation means that their production costs per kilo are higher: over four euros per kilo in non-mechanizable arid areas in the mountains, figures that are not easy to come by in the markets, which poses a risk to the survival of this type of production in the company Compared to less than two euros per kilo, which corresponds to a super intensive olive grove.

In this line of support falls the recent decision of the Spanish administration to support the future of the olive grove by setting up aid for this type of production with a fund of 30 million euros.

The agreement between Migasa, Lidl and UPA, promoted by the latter organization, originally envisaged the purchase of 1.5 million kilos of oil from this type of olive grove, paying for the olives at prices that would ensure the profitability of the activity . The agreement provided for this volume to be doubled in the second year for marketing under Lidl’s Olisone brand. The distribution group committed to selling it in its stores in other EU countries.

Source elpais.com

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