NZ importer says olive oil price hikes imminent

NZ importer says olive oil price hikes imminent

Sunday, 8 November 2015

New Zealand shoppers can likely expect price increases in Mediterranean-sourced olive oil this summer - kicking in as early as this month, says Graham Aitken, managing director of Auckland-based European food importing business William Aitken & Co.

Mr Aitken says the root causes of the imported olive oil price hikes have taken some time to filter through to New Zealand consumers but there’s no avoiding them now.

“It all stems from a very poor season for the Mediterranean last season which saw very difficult growing conditions, low yields, and overall a record poor season in over a decade. Spain, which actually produces the most olive oil, had a terrible drought, while in Italy a devastating bacteria strain led to olive groves en masse having to be destroyed.”

Total world production was down from 3.3 million tonnes in 2013/2014 to 2.4 million tonnes in 2014/15.

Mr Aitken says last year’s difficult growing season and subsequent shortage of product globally has seen international reserves significantly depleted. While this year’s coming season is looking better for the Mediterranean producers, nonetheless supply remains down putting direct pressure on the end price.

“It’s going to probably take a while to stabilize too as the new season by all accounts is set to be only average in terms of yield. It will take a while for global supply to catch up and for the overall olive oil market to settle again.

“It’s not helped by our exchange rate which has fallen since earlier this year, which only adds to costs for us New Zealand importers and subsequently Kiwi shoppers,” he says.

The global price of olive oil changes monthly with international media and sector giants reporting the continuation of significant price increases consistent with hikes over the past year. Mr Aitken says importers are now experiencing the highest buying price for 10 years, and while they’ve tried to absorb much of the cost pressure to date, New Zealand consumers will also feel it this summer.

Mr Aitken says the one litre bottle is the most popular in all Mediterranean olive oils, and typically New Zealand shoppers could expect retail price increases of $1 - $1.50 on bottles of this size.

“The reality is even with prices going up a bit, a big bottle of high-end extra virgin olive oil remains great value for money and can sit in your pantry for months. Often people will happily pay more for a good bottle of wine and that can disappear overnight so it’s important to keep some perspective.”

William Aitken & Co is a four-generation family business which has been importing and marketing olive oil in New Zealand for over 70 years. Among many products it is the exclusive importer of leading olive oil brand Lupi.

In recent years demand for imported Mediterranean olive oil has been boosted by a global health renaissance. Major medical and scientific studies continue to show the significant health benefits from the likes of extra virgin and other olive oils.

“European consumers have already been hit by these price rises. However the reality is they’re now about to hit us, with grocery shoppers probably noticing some price rises from this month.

“Given the likes of Italy and Spain’s dominance in the olive oil market, it’s amazing to think that just one record poor season in parts of the Mediterranean can have such a direct and lengthy effect on global supply and pricing. However that’s exactly what has happened. I’m sure there’ll soon be some great seasons ahead of us and so consumers need not fear.”

Mr Aitken says while price rises are imminent people should always remember the myriad of documented health benefits olive oil brings. He says one way to lessen the impact on the back-pocket is to perhaps use the more expensive extra virgin olive oil for dressings and flavour and use pure or extra light olive oil for high temperature cooking.

ENDS

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