Why olive oil is so expensive right now, and the impact it's having on restaurants

CTV National News: Olive oil prices skyrocket Olive oil prices are up by 30 per cent in the last few months due to the drought in the Mediterranean. Andrew Johnson reports.

Canadian restaurants that rely on what is being called "liquid gold" as the backbone of their menu are being forced to eat a massive extra cost during a worldwide olive oil shortage.

"We're Mediterranean, it's just like a fish needs water," lamented Amar Maroke, the owner of Vancouver's Four Olives restaurant.

Maroke says he is paying three times more than he used to for extra virgin olive oil, and switching to a cheaper alternative is not an option.

"I can taste the difference, so obviously my guests can taste the difference as well."

Four Olives has increased menu prices on select items, to try to absorb the new blow that comes after inflation already spiked costs.

"There's no choice left," Maroke said. "Groceries have gone up. Our weekly budget is up $600 a week for groceries alone, not including meat."

The problem originates in the Mediterranean, where producers are dealing with a multi-year drought.

"Unfortunately the last two years has been poor in quantity of production in all Mediterranean countries -- not only in Spain, which is the leader by far in quantities," said Rafael Alonso Barrau, commercial and export director of Oro del Desierto olive oil company.

"There is concerns for sure because only about 30 per cent of the surface in Spain is irrigated and the rest is depending on the rain so they are very much compromised," he added.

As olive oil supply has dwindled, prices have gone in the other direction. According to Statistics Canada, in March 2024, Canadians paid an average of $16.32 for a litre of olive oil. That is up from $14.30 in January. Three years ago, in March 2021, shoppers were only paying $6.62/litre.

The head of the ownership group behind downtown Vancouver's Italian Kitchen says trying to adjust prices to compensate for the surge in olive oil costs is a delicate dance.

"How much can I charge? Can I move my pasta from $25 to $40 before people shoot me on the street? Of course not," said Emad Yacoub. "We're getting to a point the consumer cannot take it anymore."

Experts expect the olive oil production issues to stretch for several years, and say restaurants trying to find a better deal on the ingredient could end up duped.

"Operators may seek better deals without asking tough questions and they end up actually providing to patrons olive oil along with something else," said Sylvain Charlebois, director of Agri-Food Analytics Lab at Dalhousie University. He adds the same is true for shoppers purchasing olive oil to cook at home.

"You should be paying a lot for authentic extra virgin olive oil. If someone offers you a cheap deal when it comes to olive oil, there’s probably something else in it."