GST hike pushes October food prices higher in NZ

Thursday 11th November 2010

The price of food in New Zealand was pushed higher last month as effects of the increased GST tax rate filtered through to consumers with the costs of all subgroups rising in October.

The Food Price Index rose 2.2% in October, compared with a 0.7% increase in the month earlier according to figures released by Statistics New Zealand today.

The main factor driving process according to the department was the increase in the GST rate, which rose to 15% in October from 12.5%, and could have lifted prices on goods and services by as much as 2.2%.

Fruits and vegetables led prices higher, rising 4% in the month, the first October increase in prices since 2005. Potatoes, carrots, broccoli and cabbage reported the biggest jumps.

For the year to October, fruit and vegetable prices rose 16.4%, the biggest annual increase since September 2009.

Grocery prices rose 1.7% in October, following a 1.2% increase in September, with the highest increases coming from biscuits, cheese and fresh milk. The most significant decreases come from snack food and yoghurt. For the year to October grocery prices rose 4.7%.

Meat, poultry and fish prices rose 2.9% in October, while ready-to-eat food increased 1.9% and non-alcoholic beverages rose 1.7%. Of this group the most significant cost rises came from lamb and steak.

On an annual basis to October, restaurant meals and ready-to-eat food increased 3.7%, meat, poultry and fish rose 1.7% and non-alcoholic beverages increased 0.7%, while pork and coffee saw the biggest price declines.

On an annual basis total food prices rose 5.1%, the biggest annual increase since July 2009.

Businesswire.co.nz

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