Oil crisis of '96: extra virgin prices soar

THE oil crisis has begun. Olive oil, that social lubricant of today's sophisticated dinner parties, is in short supply. Spain, Britain's largest provider of the Mediterranean oil, has had its olive harvest wrecked by one of its worst droughts this century, sparking a dramatic rise in prices for all olive oil from the countries of southern Europe. Suppliers are predicting that supermarket prices will rise by as much as 40 per cent this year. Tomorrow that rise will start when Sainsbury's raises its prices on olive oil by more than 10 per cent.

A 500ml bottle will go up from pounds 2.49 to pounds 2.79 while extra virgin olive oil, that essential for the well-dressed salad of rocket and radicchio leaves, will rise from pounds 2.75 to pounds 2.99. Buyers for the supermarket chain do not rule out other increases in price, and both Waitrose and Tesco said yesterday that their prices would also rise imminently.

Will it be enough to deter the middle classes from buying their now favourite ingredient? Britain's consumption of olive oil has soared in the past few years, rising from 13,000 tonnes in 1993 to nearly 17,000 tonnes in 1994. While many specialist food shops sell expensive Italian oils, including some suffused with garlic, basil and rosemary, the bulk of imported oil is Spanish.

Last year, Spain exported nearly 6,000 tonnes to the UK. But with this season's total Spanish crop estimated around 300,000 tonnes, half last year's yield, and no European oil lake to make up the shortages, the effect will soon be felt in the consumer's purse.

Richard Frenkel, whose bottling firm Leon Frenkel imports nearly half of Britain's supplies, says that price rises are inevitable. "The price flurry has been caused not just by the overall shortage," he says, "but also by lateness in this year's crop, leaving many people scrambling for supplies."

"The overriding factor is the weather in Spain," explained Siegfried Mielke, publisher of the international journal Oil World. "But the shortfall in supply has come as demand has risen all over Europe. The yield of other countries, including Italy, Greece and Tunisia, is not expected to make up for the Spanish shortage." The result? An inevitable price surge.

The rise and rise of olive oil as a British dinner table essential has been the result of an extraordinary mix of fashion trend and health fad. Twenty years ago, olive oil was most commonly found in Boots the Chemist - sold to help extract wax from children's ears - and supermarkets carried a tiny choice.

Today all the large supermarkets sell a variety of own brand, extra virgin and specialist oils. The middle classes have found a perfect ingredient, offering nostalgia for their August villa, healthy eating, and a means to be chic all in one.

The big retailers' marketing of olive oil followed hard on the heels of its promotion by TV cooks, specialist London delicatessens and trendsetting London restaurants such as the River Cafe and Orso.

Italian food, once written off as little more than dry veal escalope and soggy spaghetti bolognese, became the eating sensation of the late Eighties. Olive oil played an integral part: it was no longer just a vital salad ingredient, but an essential for Tuscan bread soups, pasta dishes and fish. Bowls of the greeny-golden liquid would be placed on tables and breads would be dipped into it as diners perused their menus. Combined with the aroma of Provencal herbs, pungent garlic, roasted vegetables and freshly shaved Parmesan, it conjured up memories of golden summer evenings in Tuscany, Liguria, the Bandol region of France or Catalonia.

Sika Carey, who runs The Oil Merchant, a specialist importers, has seen sales increase rapidly in the past few years. "Interest is enormous now. Customers are becoming very particular about taste, and the flavoured oils, such as oil and basil, or ones with oregano and peppers, are increasingly popular."

Just as olive oil moved from being part of the late Eighties' restaurant repertoire to become the dinner party accessory of the Nineties, so it also became the height of fashion in medical circles.

The British Heart Foundation and the World Health Organisation both praised the Mediterranean diet of tomatoes, garlic, lemons, red wine, bread and olive oil as perfect for cardiac health. Results from a study on diet by the National Institute of Health in Lyons showed that olive oil, with its vitamin E, carotene and unsaturated fats, acts as an anti-oxidant in the body, preventing heart disease. It was seen as the perfect alternative to the hard saturated meat and dairy fats of northern Europe.

Britain had, in fact, been slow to pick up on the merits of the Mediterranean diet. The Americans set the fashion in 1975 when two doctors, Ancel and Keys, wrote the best-seller How to Eat Well and Stay Well the Mediterranean Way. Although the Royal College of Surgeons has been warning us for 20 years that unhealthy diet was responsible for heart disease, it was not until 1992 that this particular type of cuisine received the Government imprimatur with the Health of the Nation White Paper.

That suggested we adopt a diet closer to Mediterranean patterns as the way to cut cholesterol, lower blood pressure, limit the risk of heart disease and shed excess weight.

Its biggest fillip came from the footballer Paul Gascoigne who was put on the Mediterranean diet by his Italian club, Lazio. Suddenly even tabloid newspapers started running Mediterranean diets, complete with praise for olive oil dribbled on bread as a substitute for a plate of chips.

Harvesting olive oil is one of the most ancient agricultural traditions of the Mediterranean, and it remains one of the most labour-intensive and highly skilled. The result is one of the most highly prized and expensive commodities in the kitchen cupboard.

The olives, either hand-picked or left to fall into nets, are crushed into a paste which is in turn squeezed and the oil exuded. Virgin or extra virgin olive oil is the first pressing, and most oils will mellow and flatten out with age, so will be past their best within a year.

True quality olive oils come from single estates. Restaurateurs, such as Rose Gray and Ruthie Rogers of the River Cafe, import their own highly specialist oils from Tuscany and Sicily. Last year the River Cafe alone used up 1500 litres of oil at pounds 8 a litre.

With the Spanish mass producers now having to pay pounds 3.42 a litre for olive pulp, compared with pounds 2.05 last year, Ms Gray says cooks will soon see the price increases passed on.

"That's a staggeringly high price but people have seemed prepared to pay. We have seen how aware people have become of the merits of olive oil. It's had an incredibly good press from the medical world and it's clear that the supermarkets now plug Mediterranean food. Put simply, olive oil just has the most fabulous taste."

Among those responsible for promoting the oil in recent years has been the European Union, which allocated pounds 17m for an ambitious two-year advertising and PR campaign to pep up its image.

Now Spanish producers are asking for extra cash from the EU as a subsidy to help stop the price rise and stop customers switching to cheaper oils. The EU, however, is more interested in cutting the existing pounds 1.26 per kilo subsidy for producers. It means prices could well stay high for the connoisseurs of good food for some time to come.