Think you've been paying a lot more for your groceries recently? You have.
Statistics New Zealand says food prices rose 7.6% for the year to March 2022.
That's the biggest rise since 2011, when prices rose 7.9% - and that one was influenced by the increase in the rate of GST.
In what looked like a move to pre-empt any criticism, the Government quickly issued a statement on the latest food prices. And Commerce and Consumer Affairs Minister David Clark said the Government was "committed to taking action to pave the way for additional players to enter the New Zealand grocery market in order to increase competition".
Referring to the recent Commerce Commission inquiry into the supermarket sector, Clark said: “Given the importance of healthy levels of competition in our retail grocery sector I have not ruled out going further than the options that the Commission tabled in its final report.” The full statement is at the bottom of this article.
A short time later National’s Finance Spokesperson Nicola Willis put out a statement, saying the latest food prices "confirm the cost of living crisis is only getting worse on Labour’s watch". This full statement is also at the bottom of the article.
In terms of the monthly food price rise in March, that was 0.7%, or 0.4% after seasonal adjustment.
Stats NZ said the 'unadjusted' rise of 0.7% in March "was greater than the expected seasonal increase from February to March".
The galloping food prices release came just ahead of the Reserve Bank being set to make its latest decision on hiking interest rates through the Official Cash Rate (OCR) - in order to combat generalised inflation.
These latest food price figures will contribute towards what is quite likely to be an around 7% annual increase in inflation, when the March quarter CPI figures are released on April 21.
ASB senior economist Mark Smith said food prices had risen "strongly" in March.
"High global food commodity prices and our expectations of higher wage costs are expected to lock in elevated annual food price inflation over 2022.
"Annual CPI inflation is expected to move above 7% in early 2022 (we have a 7.3% Q1 print pencilled in), the highest since 1988.
"There are signs high inflation outcomes are broadening and may increasingly be more persistent.
"Our CPI forecasts have annual inflation ending 2022 above 6%, with annual inflation not back into the 1-3% target band until 2024.
"Risks are tilted towards high inflation being more ingrained, which will clearly trouble the RBNZ and prompt a swift pace of OCR hikes," Smith said.
Food price increases were widespread in the year ended March 2022 with increases in all categories that Stats NZ measures.
"Average prices for vegetables like tomatoes, broccoli, iceberg lettuce, and cabbage were notably higher than they were in March 2020 and 2021,” Stats NZ's 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.
In terms of the March monthly rise in prices, Dewbery said grocery food prices were the main contributor to the rise in March, up 0.9%.
“This was mainly influenced by higher prices for yoghurt, canned spaghetti, chilled meat pies, and tomato sauce.”
Annual change +7.6%
In March 2022 compared with March 2021:
- fruit and vegetable prices increased 18%
- meat, poultry, and fish prices increased 8.7%
- grocery food prices increased 6.7%
- non-alcoholic beverage prices increased 2.7%
- restaurant meals and ready-to-eat food prices increased 5.1%.
Monthly change +0.7%, or 0.4% after seasonal adjustment
In March 2022 compared with February 2022:
- fruit and vegetable prices rose 1.2% (up 0.5% after seasonal adjustment)
- meat, poultry, and fish prices rose 0.9%
- grocery food prices rose 0.9% (up 0.8% after seasonal adjustment)
- non-alcoholic beverage prices rose 0.9%
- restaurant meals and ready-to-eat food prices rose 0.3%.
This is the media release issued by David Clark:
Latest annual food price figures released today confirm the need to rein in the super profits of the supermarket duopoly, Commerce and Consumer Affairs Minister David Clark said.
Today’s food price index figures show an annual increase of 7.6 percent in March 2022 compared to March 2021. This is the largest increase since the year ended July 2011 when prices increased 7.9 percent, partly influenced by the National Government increasing GST from 12.5% to 15%.
“The March increase is above general inflation figures and highlights the role the grocery sector is playing in driving up prices,” David Clark said.
“Rising food prices is 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.
“Today’s figures confirm the findings in the Commerce Commission’s grocery market study that the supermarket duopoly is making profits at the expense of everyday New Zealanders.
“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 percent was more than double the rate of normal return for grocery retailing in New Zealand of 5.5 percent.
“No matter how you cut it, it’s clear that New Zealanders are paying too much for their food and groceries.
“The Government is committed to taking action to pave the way for additional players to enter the New Zealand grocery market in order to increase competition.
“Given the importance of healthy levels of competition in our retail grocery sector I have not ruled out going further than the options that the Commission tabled in its final report,” David Clark said.
The Government will announce its response to the Commerce Commission’s recommendations next month.
David Clark said the Government also has a number of other initiatives designed to address the cost of living.
“We’ve cut fuel excise by 25 cents a litre and halved public transport fares to provide immediate relief for Kiwis, as the war in Ukraine drives up fuel prices globally.
“We recently increased support for families, pensioners and students, and in May, our Winter Energy Payment restarts, giving one million people an extra boost to help with their heating bills.
“The rising cost of living is a global challenge nearly every country is facing, compounded by COVID-19 related supply chain issues and the ongoing war in Ukraine. But we need to do what we can locally to help New Zealanders out and that means changes to the level of competition in our supermarkets.
The Government is putting measures in place to ease the pressure on New Zealanders. Ensuring consumers get a fair price at the supermarket checkout will be my key focus when we respond to grocery market study recommendations next month.”
This is the statement from Nicola Willis:
New figures on food prices from Statistics New Zealand confirm the cost of living crisis is only getting worse on Labour’s watch, says National’s Finance Spokesperson Nicola Willis.
Data released today shows the highest annual food price increase in a decade at 7.6 per cent, with fruit and vegetable prices increasing a staggering 18 per cent in the past year.
“These numbers confirm what Kiwis already know: New Zealand is experiencing a worsening cost of living crisis, with prices running laps around wage growth.
“Meanwhile the Minister of Finance continues to pat himself on the back, telling Kiwis they are better off, while in reality many Kiwis are slipping further behind each month as they struggle to keep up with skyrocketing costs.
“Labour needs to stop playing the blame game on inflation and do their bit to rein in costs.
“The War in Ukraine isn’t to blame for fruit and vegetables going up by 18 per cent in the last 12 months.
“The Government should rein in its big spending plans, hit pause on plans to add more costs to business and prioritise tax relief for the squeezed middle.
“Right now the biggest beneficiary of runaway inflation is the Finance Minister – who will rake in billions more in tax receipts as a result. He should put New Zealanders first and give them some relief.
“Kiwi families deserve relief. Under National’s tax plan, a family with two earners each on the average wage would receive $1600 a year in tax relief. In contrast, Labour is doing nothing for the squeezed middle and their failed policies are pushing everyone further behind.”
45 Comments
Truth be told , it is possible to grow a bumper harvest in a small area ... raised beds , large pots , trellises & espaliers ... we're pigging out on homegrown figs , feijoas & beurre bosch pears ATM ... mountains of fresh chilli peppers , herbs ...
... why whinge , get cracking & do something positive to help yourself ...
I don't know about this 5+ a day..
When people eat the body releases insulin which drives the body into fat storing mode. I think Kiwis could do with less food.
Ever go to bed hungry, then wake up with little-to-no appetite? That's because your body ate its own fat!
What about that sugar filled Snickers Bar? Huge release of insulin - little fat burnt! You would have to eat at least 10 Apples to equal the calories in 1 Snickers Bar.
Try eating 10 Apples in one sitting, try eating more than a couple of baked potatoes. It's called 'stomach stretch' - when your stomach stretches it sends a signal to your brain that you're full.. you won't get that signal with a wee Snickers Bar - but you will get fat!
It's like Breakfast in Schools - they're feeding these kids morning, noon and night.. never giving kids the chance to stop producing insulin and meaningfully burn fat. It's producing chub children and adults.
Too many feeders out there - in many cases it's probably akin to child abuse.
lol :)
It's a simple solution but only a temporary one, and the government will want that revenue somewhere, somehow.
These consumer societies seem like large amusement parks. The entrance looks lovely and the inside seems fun, but once you're there you get reamed at the concession stands.
The poor will just have to deal with worsening living and housing costs because property wealth is sacred in New Zealand. Soz.
Now get back to paying the taxes that fund our services (as well as landlord subsidies, universal welfare benefits for older folks etc). Hop to it!
Dropping GST on food items is an administrative nightmare & just virtue signalling.
Who decides what is 'fruit & veg'...is a punnet of hot chips not a veggie..
As well, when you have any product that is as variably priced as fresh fruit & veg that is affected by the seasons, weather,and overseas markets,it's hard to tell what the price is with or without GST...too easy for growers,retailers to 'remove GST' and then stealthily raise prices for all the reasons noted above and pocket the gst themselves.
Unless it is a product with a fixed RRP,it is too hard to monitor.
like fuel --- of course it can be done -- and it will make prices cheaper -- by 15% maybe not but 10% yes -- and it should be done -- re the lost revenue -- its a small amount compared to the current largess - 1 billion a quarter in emergency accommodation - often paying $280 a night for $120 motel rooms - or $51 million not to build a cycle bridge -- as if they ever would or could until a 2nd crossing -- adn 200+ enquiries , working parties - that all come up with nothing different -- Mental Health for example -- huge inquiry large cash investment - -virtually all on MOH wellington salaries and paperwork - - virtually nothign at front line and no improvements !
Nah, someone has already done the hard work -
https://www.gov.uk/guidance/food-products-and-vat-notice-70114#:~:text=…
No wonder people are leaving New Zealand for Australia... I don't think our government can get rid of GST unless if they decide to do land tax. But they always believe that most New Zealander's wealth is in property, this creates their so called "wealth effect". So I don't think they will tax on land either. I think what they will do is to continue to use Omicron, supply chain, war in Ukraine as what Orr did in previous months. Lol
A land tax is anathema to a Parliament, both Government and Opposition, stacked with property-owners. But yes, abolish GST and replace it with a suite of land and property taxes. Scrap income tax on the first $25,000 or $30,000 while you're at it; alternatively, have a high flat income tax ameliorated by a UBI.
This is a selective interpretation. The Australian GST scheme is far newer and was modelled on ours. Initially GST on food was included, like ours. They opened up a huge can of worms by exempting some food products and not others. Defining what food actually is for tax purposes was apparently hard in the 1990s, it would be even harder here with demands that certain things like soft drinks incur it at a higher rate, and so on. There is both upstream and downstream accounting complexity, and the consumer would lose sight of what the tax is on each item should it become variable. It's a big step backwards in terms of transparency and complexity if you already have a system as simple as ours.
I was living there when they attempted to remove GST from food ... but only from fresh food , not cooked ... OMG , what a shambles they created ... when GST in Woolies was charged on deli goods , but not on apples ... whereas bread , ummmm ...
... easier to just apply GST evenly across the board ...
So...
- fruit and vegetable rises - take a bow climate change, international fertiliser costs, and rampant duopoly profiteering
- milk, dairy, and eggs (a 9% rise mysteriously not mentioned!) and similar meat / poultry increases - take a bow overseas consumers who determine the price we pay (and support juicy dividends)
- bread and cereals (7%) - take a bow Putin (and another dose of profiteering obviously)
What is common in all of the above? The hard fact that reducing consumer demand in NZ will make very little difference to those domestic prices - unless reduced demand persaudes our duopolies to reduce their profit margins.
But, let's all have a conversation about how much the OCR needs to increase to tackle this runaway inflation regardless.
It’s becoming clearer, by the day, that our leaders, of any persuasion, are at best I’ll equipped to lead and at worst orchestrating our collective demise. A sad commentary but we pay the price, whatever it is, while we celebrate that we retain the choice as to our direction. A poor state of affairs, but until the great mass of the unwashed wake up, we are destined to repeat our failures. Food affordability and availability may be the straw the breaks the camel’s back !
They are going to keep rising significantly as well for at least another 18 - 24 months or more. This will be due to a number of factors but mainly the war, geo political situation, supply shocks, climate events, ongoing pandemic to name a few. Avian flu in the US is wiping out a good number of their chicken and egg supplies as well. Another one to ad to the list.
well if we are importing chicken and eggs from anywhere in teh world -- the problem is not Avian flu or supply chains -- its ridiculous consumer habits -- we produce way more than enough here in NZ -- start buying local folks -- cut down teh food miles -- cut down the costs
Don't think I've ever seen foreign eggs in a supermarket. (Perhaps quail eggs in a jar?)
Chicken, yeah, probably the stuff in cans, which I have never tried, or the processed nuggets etc. Processed chicken is only distantly considerable to be "food", IMO.
Food is generally the stuff around the edges of a supermarket, while the aisles contain a bunch of less nutritionally valuable concoctions.
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