Annual food price inflation has stayed at a 13-year-high for September of 8.3%. This is much higher than economists were expecting.
The figure is very significant coming ahead of the release of Consumers Price Index inflation figures next Tuesday. The expectation is that our annual inflation figure will have fallen from a 32-year high of 7.3% as of the June quarter to perhaps 6.5% - but these food price figures may cast some doubt on that.
On a seasonally adjusted-basis food prices have risen between 0.9% and 1.0% in each of the past five months.
National’s Finance spokesperson Nicola Willis was quick to respond, saying that rising food prices were "continuing to slam Kiwi budgets".
"It’s impossible to get ahead under Labour. Food is up, rent is up, and petrol is up. With wage growth lagging inflation so significantly, it’s no surprise that Kiwis are getting pummelled."
The Green Party said the Government needed to "urgently" increase support for people struggling to put food on the table.
"The Green Party will keep saying it: the Government needs to immediately increase support so people can afford nutritious food for them and their families," Ricardo Menéndez March, spokesperson for commerce and consumer affairs, said.
Statistics New Zealand said in September 2022, the annual increase was due to rises across all the broad food categories measured.
Compared with September 2021:
- grocery food prices increased by 7.7%
- fruit and vegetable prices increased by 16%
- restaurant meals and ready-to-eat food prices increased by 6.9%
- meat, poultry, and fish prices increased by 6.7%
- non-alcoholic beverage prices increased by 4.8%.
Grocery food was the largest contributor to this movement.
"Increasing prices for yoghurt, two-minute noodles, and tomato-based pasta sauce were the largest drivers within grocery food," Stats NZ's consumer prices manager Katrina Dewbery said.
The second-largest contributor to the annual movement was fruit and vegetables. The items within this group that influenced this movement the most were capsicums, tomatoes, and broccoli.
In terms of the monthly food prices they were 0.4% higher in September 2022 compared with August 2022.
However, crucially, after adjusting for seasonal effects, they were up 0.9%.
Fruit and vegetable prices are expected to fall at this time of the year due to better seasonal availability.
And they did fall in price - but just by 0.1%.
After seasonal adjustment, however, the fruit and vegetable prices actually rose a whopping 3.9%.
"This seasonal movement for fruit and vegetables indicates that based off previous patterns a larger fall in fruit and vegetables for the September month is more typical," Dewbery said.
"This helps explain why the overall seasonally adjusted movement is higher than the unadjusted increase."
Non-alcoholic beverages had the largest impact on the 0.4% monthly rise. This was led by increases in the cost of large bottled soft drinks (up 3.4%), instant coffee (up 5.2%), and poured soft drinks for example, at cinemas or fast-food outlets (up 2.2%).
The second largest contributor to the overall monthly movement was restaurant meals and ready-to-eat food, which rose by 0.6%. This was driven by rises in the price for hamburgers (1.7%) and takeaway pizzas (2.0%).
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“Increasing prices for yoghurt, two-minute noodles, and tomato-based pasta sauce were the largest drivers within grocery food,” consumer prices manager Katrina Dewbery said.
You can almost hear the collective gasps of horror from uni students all over the country.
Fruit and veg growers as well as livestock farmers have been getting hammered the last 5 years. Climate change rules and covid. Ridiculous covid rules meant there was no staff for the harvests.
It doesn't help
Yesterday immigration minister wood threw opened the doors reverting to past visa policies. Next year will be even more liberal
The large price increase for a visa hasn't helped
https://www.immigration.govt.nz/documents/media/changes-to-fee-and-levy…
Anecdata I know, but <insert Australian chain here> seems to have had another round of recent price rises in the last two weeks and a fraction of the number of items they usually have on special, with the remainder now up at a higher price.
This will also not be captured in the current data set, so we've got that on top of whatever comes down the line in the next two and a bit months.
Also seeing snapper knocking on the door of $50 per kg, with little availability in a lot of stores of other fresh seafood options.
Yes, I could buy cheaper frozen crumbed options, but I could also just drink a whole bottle of cooking oil too. Neither would be that good for me.
$4kg, guessing you must butcher it yourself. We raise a few sheep each year and try and get out and fill the freezer with venison a couple of times a year. Usually get a local butcher to tidy them up for us which probably costs about $4-$5 a kg depending on what we are after.
Nope. Increased compliance burden will just replace any reduction in price.
You don't just not charge the gst, one needs to adjust the inputs accordingly (eg the gst on the diesel the delivery truck used when carting gst and gst exempt products, electricity, rates and so on).
And that's after we argue about what is a fruit or a vege (eg yoghurt with fruit in it?)
Wrong. They very much envy over how our gst system works compared to theirs. Expensive, time consuming and tax inefficient with no benefit delivered to consumers.
They had several attempts to introduce gst in AUs, failed several time and only finally got it through by conceding the exemptions.
So unless you want even more IRD employees, more compliance for business and less efficiencies all round, then think again.
Those proposing these exemptions tend to be financially/tax illiterate lefties.
So at that point bagged lettuce is caught but regular lettuce is not. You're trying to promote better food choices, not packaging.
There's a reason the Australian GST on Food guidance is dozens of pages long. This isn't as simply is 'just doing X' or 'just doing Y'.
The only simple option is the one we've got, and that's why they wanted to copy it.
Why not jack up the price of unhealthy foods, or encourage the manufacturers of unhealthy foods to convert to healthier options? There's plenty of brands offering expensive healthy food while still supplying cheap processed foods. I thought economies of scale and competition were meant to bring prices down for the consumer? Instead the big corporations buy up their competition and fool the consumer with the illusion of choice. You only have to look at the 5 or 6 giant corporations that own the majority of FMCG brands. They're also the biggest polluters and enablers of environmental harm and exploitative practices.
How to get more money and time into the hands of the people so they can vote with their wallets, so they're not reliant on cheap, nutrient deficient food? How to support and encourage healthier behaviours for those that want to but may be struggling in various ways?
I've also seen it mentioned that due to our industrialised growing practices most of our fruit and veges are also nutrient deficient and no longer contain the beneficial vitamins and minerals needed for good health.
We need a new narrative around healthy wellbeing and quality of living, and we need to encourage, support, educate and empower each other.
But yeah let's piss arse around with GST.
Or, even better, just stop paying out the pension and let the retirees figure out how to make accommodation and food costs work on todays' levels of relative income.
Might be a bit less quick to crap all over young people once they stop getting prize money for being over a certain age.
I can't think of a better way of proving my point about the entitlement of older New Zealanders than implying that someone might beat me to death over it.
I'll be lucky if there's anything left in the kitty when I get to 70 or whatever the retirement age ends up being after a life time of work paying for everyone else's.
Annual food price inflation of 8.3% is not a surprise when you look at actions of the government to increase minimum wage, shut the borders & change our immigration settings so that overseas pickers & agricultural workers numbers are restricted.
The number of beneficiaries have increased substantially - there are plenty of jobs, so many of them don’t seem to want to work. The amount of cash in circulation had also increased significantly so maybe there are more cash jobs going around.
Do the Pacificers and others coming here on casual work for 3-6 months for the orchard and wine industry etc have to relocate their families? As soon as they return home do those countries put them back onto unemployment benefits straight away as there's no work for them at home? There's something seriously wrong with unemployment benefits here if overseas temporary workers can make the cut and it's generally viable for them to do so.
Yes, however overseas migrant workers income in NZ is fart superior to their own countries relatively therefore they appreciate the work here and are more motivated to do it. Many jobs we snub our noses at they will gladly do and love the privilege of being able to do it. We have given out far too much money for nothing with removing the youth wage and increasing of benefits and minimum wage which has disincentivised people to return to work. However that aside, let's start focusing on the corporate profits that have increased so drastically in the last 2 years, there's your inflation fire-stoker right there
I walked around my local mall, half of the shops had job vacancies posted in their windows. People always say "oh its rural work, or there's no accommodation in town for workers" blah blah blah, but there is a ton of work going in the cities so what's the excuses for the tens of thousands of unemployed in urban areas still being unemployed?
Hmmmmm.. flow on effects
Over the years the U.S. and the EU have held up sanctions against the oil producers Iran, Venezuela and Russia. They also destroyed parts of Libya's oil industry. In total the sanctions have kept some 20% of global oil production either off the markets or made them more difficult to buy and sell. On top of this U.S. relations with major Middle East producers, especially Saudi Arabia, have cooled down. Link
I was under the impression that sanctions against Russian oil is only since the 2022 Russo-Ukraine war. Iran at least twenty years and Venezuela at least 10 years? Time for supply to have smoother out without too much of a price jump for extended periods. Russia too recent and its impact higher all round than Iran and Venezuela as in total with all three a lot more has been knocked out. Don't know the numbers though,
https://i.stuff.co.nz/business/130151127/reserve-bank-recommends-removi…
Yesterday read the above from RBNZ, what does it implies
1: RBNZ knew it comming - inflation
2 : May be RBNZ knows that are screwed and want to concentrate only on Inflation and our FM - Robertson is trying to pass on the housing headache to RBNZ. Mr Orr in trying to shoo away came out in open to avoid pressure tactics from Labour Party.
This is just the begining of blame game - passing the parcel.
"Grocery food was the largest contributor to this movement." The supermarket duopoly do not need to exercise any restraint when it comes to raising prices. If they expect a 30% margin on item A then they take it. If item A's supplier needs to increase price from $1 to $1.20 per unit to recover their increased costs and they have enough pricing power to get the increase over the line with the duopoly.. Then the duopoly just take their 30% on top of $1.20. So the retail goes up from $1.30 to $1.56.
The supplier needs their 0.20c to stay in business. The duopoly just bank another 0.6c per unit in profit.
0.6c per unit seems like chicken feed. But that is how the million dollars a day in excess profit is made.
Can we please have some real interest rate rises from RBNZ.. we should be at 6% OCR now. Well we shouldn't be there, this should never have happenned... but given that we have mismanaged our selves into this spot... we need to take the medicine... and get rif of those that caused it.
Agree. Economy fundamentals will teach the reserve bank governors, how not to mess but with giant size ego that most governors and experts have - that they can never go wrong even if they see blood on the street.
To prove a point has any governor of reserve bank till date ever accepted that they goofed up and are sorry.
This is not hindsight as everyone on street knew what was happening in 2020 and 2021.
Shows people still have plenty of money to eat out. Alternatively that particular hospo has little or no competition in the area for people to choose from. It's my feeling that those who can afford to go out and eat are not poarticularly fussy about price irrespective of quality, otherwise there'd be more hospos going under. I was never particularly concerned about hosps going under during Covids. There'd always be someone to pop up and carry on afterwards.
Inflation is hurting everyone but people who are already struggling to purchase food and shelter will be at crisis point. People wondering why crime is on the rise if you work and still cannot feed family what else can you do. Unless government starts building housing with low cost rent for thousands we will see more social breakdown.
Most people have been the victim of some crime but now in some areas of Auckland crime is a every day occurrence car stolen, house burglary, at the moment violent crime are not common but as people become more desperate it will happen. We have huge social problems people living in cars, on streets food bank lines.
Agree that ccrime rate goes up in difficult time but in NZ crime rate is also high as criminals have more rights and are aware of it.
Which country in the world does not allow its citizen to defende themeslves, their family and property. Think NZ will stand out.
As a matter of fact, NZ has more sympathy towards criminals than average hard working citizens otherwise till now, why has no one ever raised the issue of right to self defence in NZ.
Should be next election issue, time to start the debate.
Benefits have gone up with inflation, wages have gone up with inflation, unemployment rate virtually non-existent, minimum wage up something like 30% since Labour were elected.
Not saying there aren't people really struggling, but not convinced many are struggling more than they were a few years ago.
Then there's shrinkflation.
I haven't checked yet, but I'm sure Big Macs and other McD's burgers are smaller than they were a decade ago. On a recent visit (we go twice a year or so when travelling) my kids were underwhelmed by the step up from cheeseburger to Quarter Pounder or Big Mac, and the so called double big mac was like a bacon double cheeseburger from Burger King without the bacon.
Never mind the latest Cadbury chocolate I saw in the shop - 150g, when they're usually 180g or so. Thank goodness for Whittakers' chocolate who have kept the 250g blocks
Whitakers chocolate is generally at least 5% and closer to 10% more than Cadbury's on a per gm basis. Whitakers saw fit to contribute to Nigella Lawson's retirement fund in order to sell their brand of up market chocolate which I suspect doesn't have much different ingredients than their usual run of the mill types. Need to pay for the smart packaging as well on the upmarket brand. Price difference probably spilled over to the ordinary type as well. I'd support Whitakers on a 10% price difference but my taste buds have got used to the 70% cocoa Cadburys
Ya all should start large gardens and orchard. I have 3 raised boxes and crop of spuds, corn, tomatoes and beans out back. Have small orchard in it's second spring now.. so next year should start harvesting plums, peaches, apples, oranges, (avocados in 2 more years) etc.
That was the point of the Savage Labour government reforms of the 40's. Not so easy for many now that can't afford their own backyard. You've also got to look at the environment/conditions different generations have been raised in. It may be the solution but may also require more supportive conditions to implement again.
You have to wonder why populations have voted to live in boxes that are totally reliant on external suppliers for all the basic necessities of human existence.
Everyone hopes to go off to work for the day and how they fill that day will generate them enough to return to the box and ship in everything they need/want.
Sounds kinda nutty if you think too much about it.
I urge people to investigate the necessity of eating so much fruit and vegetables. Modern fruits have been developed to have such high sugar content that they are practically sweets. They have often been cool stored for so long that they have lost a lot of the meagre good qualities that they did have and just retain the fructose and fibre. Fruit juices are a major contributing factor for fatty liver disease.
Vegetables are almost devoid of nutrition being mostly water and indigestible compounds and natural toxins. It's something only to be eaten in quantity in desperation. Even small children are aware of this fact. Small children wither and die if they only eat vegetables. You don't need to buy fruit and vegetables out of season at exorbitant prices. It's madness.
The Bible always extolled the eating of meat and indeed it was the only legitimate food to offer as a sacrifice. Remarkably even the ancient Brahmins of India feasted on beef and recommended eating beef for health reasons until they eventually changed the recommendations for the common people due to exploding population levels in the subcontinent.
I purchased a 3.5kg lump of rump steak from Countdown for only $52 this week. Pretty good value at $14.90 a kilo. Eggs and chicken are pretty cheap too although I would recommend getting the highest quality products if you can afford them.
Well it's hard to not be enthusiastic about this when one personally experiences how life changing it is. That said everyone should do their own research.
The high cost of fruit and vegetables shouldn't slam people's budgets if those products are out of season. Capsicums, tomatoes and broccoli are not essential to human health and there are many alternatives. Purchase products that are in season.
As for meat, as I have pointed out before, this is a major part of NZ's primary industry. If the demonization of red meat turns out to have no basis in fact then this will be very good news for our exports.
Inflation compounds, right? So the graph of annual change going back 14 years showing that almost every year we had a >0% food price index hides the fact that a 7% increase in 2022 is a much larger absolute number than even a 10% increase in 2008. Surely compounding inflation = runaway inflation after a sufficient length of time? If my time horizon for saving for my retirement is about 35 years... my efforts are looking pointless.
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