Cost-of-Pizza Shock Hits Italy as Surge Far Outstrips Inflation

(Bloomberg) — Enjoying one of Italy’s classic dishes has just become noticeably more expensive, with the average cost of cooking a Pizza Margherita up almost 30% in December from year ago.

That far outstrips last month’s inflation rate of 12.3%, which was driven by surging energy and food. The contrast underscores how, even after 75 billion euros ($81.6 billion) of government cash spent on helping Italians with gas and power bills, there’s only so much that can be done as other prices inch up.

Analysis of the quintessential Naples fare is revealed by Bloomberg’s new monthly Pizza Margherita Index, which aims to provide insight into the cost-of-living shock for Italians by assessing the components of preparing one of the country’s most well-known and simple meals. 

Crunching data from the Italy’s national statistics institute and finance ministry, the gauge tracks the rising prices of basic ingredients — flour, tomatoes, mozzarella cheese and olive oil. We’ve also assumed the electricity consumption needed to cook a pizza with a home electric oven.

The cost of making one at home has risen much more quickly than that of opting for a pre-prepared version. The price for that item is up by just 9.9%. Economies of scale might help there.

Aside from energy, the steepest jump in cost in the index was for mozzarella — up almost 27% in the same period — and flour, which increased just under 22%. Those and the other ingredients are fairly common items in a typical household’s shopping basket, even if not everyone takes the time to make pizza at home.

While there’s ample debate about which toppings are admissible on a true Italian pizza — pineapple is a no-no — the Margherita, along with an even simpler version without mozzarella known as the Marinara, are varieties most appreciated by purists. 

They are probably the most commonly produced among the 8 million pizzas estimated by food guide Il Gambero Rosso to be cooked across the country every day. 

Apocryphally named after Margherita di Savoia, the first queen of Italy after its unification, legend has it that the Pizza Margherita was originally created in honor of her visit to Naples in 1889. The dish’s colors, when a leaf of fresh basil is added at the end for flavor, recreates those of the green, white and red Italian flag.

Several variations of pizza exist, including the paper-thin Roman variety and the very rich New York one. Even so, Neapolitans assert that theirs is in a class of its own.

Supporting that claim, the European Union recognized it as a Traditional Specialty Guaranteed product. That designation requires a wood oven at 485 degrees Celsius (905 Fahrenheit), ensuring the crust is at least 1-2 centimeters high, and using only specified products including extra virgin olive oil, fresh basil, buffalo mozzarella or traditional local mozzarella, and local tomatoes.

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—With assistance from Jogi Sidhu.