Highest annual food price increase in more than a decade

Wednesday, 13 April 2022

Food prices jumped 7.6 per cent last month compared with March 2021, the largest annual increase since 2011, Stats NZ said on Wednesday.

In the year ended March 2022, food prices increased in all categories measured by Stats NZ, led by an 18 per cent increase in the cost of fruit and vegetables.

Grocery food prices increased 6.7 per cent, while restaurant and ready-to-eat food prices increased 5.1 per cent.

Prices for meat, poultry, and fish prices rose 8.7 per cent and non-alcoholic beverage prices increased 2.7 per cent.

Annual food prices have made their largest increase in more than a decade, Stats NZ says.

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“Average prices for vegetables like tomatoes, broccoli, iceberg lettuce, and cabbage were notably higher than they were in March 2020 and 2021,” Stats NZ consumer prices manager Katrina Dewbery said.

“There were also higher prices for dairy products like two-litre bottles of standard milk and one-kilo blocks of mild cheese.”

These increases were partly offset by decreasing prices for avocados, boxed chocolates, and bacon.

Commerce and Consumer Affairs Minister David Clark says the latest figures on rising food prices confirm the need to rein in the “super profits” of New Zealand’s supermarket duopoly. (File photo)

Last month’s annual increase was the largest since July 2011 when prices increased 7.9 per cent, partly influenced by a GST increase from 12.5 per cent to 15 per cent in October 2010.

Commerce and Consumer Affairs Minister David Clark said the figures confirmed the need to rein in the “super profits” of New Zealand’s supermarket duopoly.

“The March increase is above general inflation figures and highlights the role the grocery sector is playing in driving up prices.

“Rising food prices are a global issue. Omicron, ongoing disruptions to global supply chains and Russia’s invasion of Ukraine is putting pressure on prices in every country, but that is exacerbated here by the lack of competition at the checkout. And that is something we can act on.”

The Commerce Commission’s grocery market study found the supermarket duopoly was making profits at the expense of everyday New Zealanders, Clark said.

“Even at their conservative estimate, the market study found that the major grocery retailers were earning excess profits of around $1 million a day, well above what would be expected in a workably competitive market.

“The average return of the major grocery retailers at over 12 per cent was more than double the rate of normal return for grocery retailing in New Zealand of 5.5 per cent.

“No matter how you cut it, it’s clear that New Zealanders are paying too much for their food and groceries.”

Monthly food prices rose 0.7 per cent last month compared with February.

After removing regular seasonal impacts, food prices rose 0.4 per cent. This means that the price increase in the unadjusted series was greater than the expected seasonal increase from February to March.

Grocery food prices were the main contributor to the monthly increase, mainly influenced by higher prices for yoghurt, canned spaghetti, chilled meat pies, and tomato sauce, Dewbery said.

Fruit and vegetable prices rose 1.2 per cent in March, influenced by higher prices for cabbage, tomatoes, strawberries, and kumara.

“The average price of cabbage increased 28 percent in March, from $3.92 to $5.03 per kilogram,” Dewbery said.

Meat, poultry, and fish (up 0.9 per cent), non-alcoholic beverages (up 0.9 per cent), and restaurant meals and ready-to-eat food (up 0.3 per cent) also contributed to the rise in March.