AAt Marta, a Roman restaurant and bakery in Sydney’s east, Flavio Carnevale has seen “massive” increases in wholesale olive oil prices. “A bottle of Australian olive oil used to cost $10 a litre, now it’s $12 to $15… It’s even worse with imported ones,” says the restaurant owner. You pay up to $18 a litre… It’s huge.”
The kitchen uses 10 litres of olive oil a week, but higher prices are forcing chefs to be cautious. “You can’t just use it as it comes from the barrel,” says Carnevale.
Australian olive oil prices have risen 20 percent in the past year. Local growers and producers say they are not benefiting from the price increase due to difficult growing conditions and higher production costs.
In Victoria, the state where most of Australia’s olive crop is grown, growers have been affected by heavy rains and flooding for two years in a row, while olive groves in South Australia have been hit by frost.
“Olive trees are under stress and therefore susceptible to disease,” says Melanie Whyte, co-owner of Gooramadda Olives in Rutherglen in northeast Victoria.
Victorian olive growers are also battling an infestation of the olive lace bug, a native sap-sucking insect that is considered a serious threat to the local olive industry.
Production costs have also increased; the costs for wages, utilities and transport at Whyte’s company have increased by around 40 percent.
This is reflected on supermarket shelves. This time last year, a 750ml bottle of extra virgin olive oil from Cobram Estate – Australia’s largest olive oil producer – cost $20. The same product now retails for $25.
“(The producers) have not benefited,” says Whyte. “We are not making a profit from it. We are just covering our costs.”
In the northern hemisphere, a drought in Europe led to a global supply shortage and thus to a significant increase in prices in Italy and Spain, the world’s largest olive oil producers.
As a result, prices for imported olive oil in Australia have risen by about 70 percent, “almost double the price compared to two years ago,” says Michael Southan, executive director of the Australian Olive Association.
Local and global market conditions have created an unusual situation where a bottle of Australian extra virgin olive oil costs the same as European products, or even slightly cheaper. “(Usually) the imported stuff is cheaper than the Australian stuff,” Southan says.
At Coles, for example, the 750ml bottle of Cobram Estate extra virgin olive oil costs $25 ($3.33 per 100ml), while the equivalent product from Italy’s Bertolli is slightly more expensive at $26 ($3.47 per 100ml). A 750ml bottle of Squeaky Gate ($20 or $2.67 per 100ml), made from Australian olives, is cheaper per unit than a litre of extra virgin olive oil from Spain’s Moro Primero, which costs $27 ($2.70 per 100ml). (Both Squeaky Gate and Moro are owned by Australian company Conga Foods.)
Outside of supermarket shelves, Australian boutique producers operate in the premium market. They typically produce oils from younger, first-press olives with a fruitier flavour profile, and because they are produced locally, Australian customers get a fresher product.
Smaller producers, including Mount Zero Olive Oil in Victoria’s Grampians region, “are trying to produce the best they can rather than competing on price because that’s not possible given the volumes coming from Europe,” says Richard Seymour, managing director of Mount Zero. “Overall, we’re producing a higher quality product.”
Although prices for all oils have increased, Southan said price parity represents an “opportunity” for Australian producers and customers who “will realise how good our olive oil is”.
As for when a price drop will occur, Seymour says, “it’s a bit like looking into a crystal ball.” In November, when the Australian plants start to flower, he believes local growers will have an idea of how successful next year’s crop will be. In late April, during the harvest and pressing season, they will get an idea of yield and supply; and customers will see how this affects retail prices next June when the bottles hit the shelves.
For imported oils, customers may feel the impact of global supply on prices a little sooner, Seymour says.
“The harvest season (in Europe) starts in October and in November or December we will see whether there will be a correction or not, depending on how abundant the harvest is.”
