An especially dry summer has had a major impact on crop yields this year, and as a result the quantity of olive oil and wine is likely to suffer.
For olive oil, this is a mixed blessing. At least for the consumer, it is bad news, as prices will rise, according to this article: No rain in Spain, olive oil price soars.
However, for the olive farmers, the price rise will be a godsend. Just three months ago farmers were complaining about how supermarkets were pushing down olive oil prices, driving growers out of the industry. Most consumers probably won't mind another euro added to the price of their bottle of oil if it helps keep the farmers in business.
This year's drought is having a different effect on grapes in Europe - but this time everyone gains. That's because, though grape yields are down throughout Europe, the smaller grapes actually taste better. Reuters quotes a Portuguese wine maker who says "Fortunately, small berries are correlated with high concentration. So, at this moment, we have very high quality wines in process." Another article, Smaller Harvest, Better Quality? finds that Italian grapes "are expected to be very concentrated, rich in tannins and colour and with a high potential alcohol" and that similar results are being seen in Spain.
Furthermore, the increased quality and lower quantity shouldn't see a price hike, as wine producers tend to absorb price fluctuations.
So, a better market for olive oil producers and better wine for the rest of us. Sometimes there is a bright side even to a drought!