Lovers of olive oil could face the prospect of supplies of their favourite cooking oil being rationed, experts have warned.
For poor harvests in Spain and Italy have fuelled warnings from olive oil industry experts of a massive shortfall in supplies reaching the market, the latest research shows.
Trade magazine The Grocer reported that cooking oil prices are on a slippery slope. Data from Kantar Worldpanel shows that although volumes have risen a healthy 2.5 per cent over the past year, value is down 2.8 per cent due in part to the ongoing price war raging in grocery.
But The Grocer says that while many categories are feeling its effect, the price war has come at a particularly difficult time for olive oil players.
Retail prices have been squeezed due to hard promotional tactics and now costs are escalating as a result of poor harvests, leaving some in the industry to speculate about the likelihood of supply rationing in the future.
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Walter Zanre, UK managing director of Filippo Berio, told The Grocer: ” If there were to be another bad harvest next year I think we would have the prospect of rationing people in terms of supply.
“In 15 years in this business this is the worst year I have seen. There is not enough oil to meet demand. Sourcing good quality extra virgin in the second half of the year will be very difficult.”
Volume is up year on year with High Street shoppers putting more oil into their basket each trip.
But the report shows that the oils category value decline is driven solely by Britain’s shoppers paying a lower price per litre as the big four supermarkets – Tesco, Asda, Sainsbury’s and Morrisons – cut prices in response to competition from discounters Aldi and Lidl.
Mr Zanre said: “The discounters are really having a big impact on olive oil. They are taking a larger share and the big four are reacting, so the natural result is deflation all round.”
While the big four lost ground in the category, there was growth of 16.1 per cent for Lidl and 7.3 per cent for Aldi, who between them accounted for 9.6 per cent of category value sales.
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According to the International Olive Oil Council, there will be a shortfall of 783,000 tonnes this year when measured against the average global production of the past five years.
Poor harvests in Spain and Italy, where a wet summer led to olive fly and fungal attack, are the main reasons for the fall.
The Grocer says the implications for suppliers and their customers are potentially serious, Despite the prospect of limited supplies, restoring value will be tough for olive oil and the other two main oils —-sunflower and vegetable.
While volumes of sunflower oil have increased by 6.6 per cent over the past year, those for vegetable and extra-virgin olive oils have fallen – suggesting that some consumers are trading down to cheaper varieties.
The report says that value is being added by the strong growth of rapeseed and specialty oils such as coconut but these oils remain a small part of the category.
For oils to recover overall, there will need to be a step change for olive, vegetable and sunflower.
Article sourceOlive oil shortage is a pressing issue, say experts,