The New York Times Artcle By Edward Lewine

Aug 9, 1998

NEW YORKERS & CO.; Inflation Intrudes on the Cocktail Hour


Published: August 9, 1998

HOSSEIN AIMANI opened the vault of his Long Island City warehouse, releasing a luxurious fishy smell. Inside were two tons of caviar packed in blue four-pound tins. Total street value? One million dollars, and possibly more soon.

Many in the caviar business say there will be shortages and price inflation this fall because the populations of sturgeon that produce the eggs known as caviar are declining and because new regulations will limit how much caviar can be imported.

''Based on the inventory, I'm not worried,'' said Mr. Aimani, who founded Paramount Caviar in 1991. ''We have caviar stored in Europe. They are bringing in product as we speak.''

It may be no more than slimy eggs extracted from the bellies of various kinds of sturgeon, especially those in the Caspian Sea, the mammoth lake between Russian and Iran, but caviar is big business in New York City. Two thirds of the 60 tons or so of caviar legally imported each year comes through New York, according to the Federal Fish and Wildlife Service.

''The bulk of it is bought and sold by New Yorkers,'' said Charlie Gagliardo, a manager of Citarella, the fish store with locations on the Upper West and Upper East Sides. ''Go to Ohio. They aren't going to pay for it. They don't even know what it is.''

These days caviar dealers operating in New York are bracing themselves. Some 90 percent of imported caviar comes from Russia. But because of rampant overfishing since the fall of the Soviet Union, last spring the sturgeon were officially declared to be endangered. Caviar prices have already begun to inch up, and dealers expect a steeper rise in the coming weeks and perhaps an even worse one over the winter holidays, peak caviar time.

''I'm fearful of this holiday season,'' said Saul Zabar, whose mega-deli, Zabar's, is one of the biggest retailers of caviar. ''Either we won't have product or we'll have the product but at bizarre prices.''

Several companies in New York import caviar, and the five that are widely considered major forces in the business all say they get their stock directly from Russia. They all sell retail through catalogues and ''800'' numbers and wholesale to restaurants and hotels. Some have multiton contracts with air and cruise lines. Some, like Petrossian, Caviarteria and Caviar Russe, have their own restaurants. Others, like Paramount Caviar and Urbani Truffles and Caviar, operate out of warehouses.

Caviar dealers have a reputation for being tight-lipped. ''It is a business that is so full of mystery,'' said Susan Friedland, author of ''Caviar'' (Scribner, 1986). ''It is so hard to prove the provenance of a pound of caviar.'' Dealers agree, at least when it comes to their competitors.

''I always thought that this industry was made up of an incredible group of car salesmen,'' said M. David Magnotta, the managing director of Caspian Star Caviar, which owns Caviar Russe.

Caviar was not always so mysterious. Ms. Friedland said that during the 1800's American waters were so full of sturgeon that New York bartenders offered the roe free with beer. Pollution and fishing wiped out local populations around the turn of the century, and dealers began importing caviar from Russia. In the Soviet era, prices rose drastically because the Communists placed tight controls on the sturgeon catch. The caviar was of uniformly high quality then, dealers said, but the quantity was roughly half what it is today, and prices were much higher.

Then the Soviet Union fell, and the sturgeon were left unprotected. In the 90's, caviar of varying qualities and from various sources poured into the United States. Prices dropped. ''Without controls it was every man for themselves,'' said William Donato, an agent with the Fish and Wildlife Service in New York.

But now over-fishing and pollution is threatening to wipe out Caspian sturgeon. According to the Federal Government, the number of mature Caspian sturgeon has declined 70 percent since 1978. Last year, the sturgeon were placed under the Convention on International Trade in Endangered Species. There will now be limits on the Caspian sturgeon catch and on the amount of caviar allowed in the United States. All imported caviar will now need documentation on its origin and will be subject to random DNA testing. Caviar that doesn't match its papers will be sent back, almost insuring that it goes bad, or seized.

''I think it is going to go back to the 80's when the Russian Government controlled caviar,'' said Rosario Safina of Urbani. ''The price is going to double or triple.''

The important spring catch was tiny this year, dealers said, and prices have already gone up slightly, by up to 5 percent. But that, dealers say, is just the beginning. In addition to the new limits on the sturgeon catch, a 15 percent customs duty on all Russian imports, which went into effect June 30, will have an impact on prices.

But as one dealer put it, caviar has always been a matter of luxury, and an expensive price tag never hurt a luxury item. ''There are people who will pay any price,'' Mr. Magnotta said. ''Some people will drop out, others will pay more, and it will balance out.''