Price of food up 7.4%

Steak prices rose substantially in the year ending May. Photo by Jane Dawber.
Steak prices rose substantially in the year ending May. Photo by Jane Dawber.
Rising food prices have started to pinch, with Statistics New Zealand yesterday reporting a 7.4% in the cost of food in the year ended May.

That included a 2.2% lift in October because of an increase in GST, but is still the largest annual rise since the year to July 2009.

Food prices became political yesterday, after the release of the price rises.

Labour and Green MPs pounced on the latest statistics as a sign government policies were making the problem worse.

However, Finance Minister Bill English said after-tax wages continued to rise faster than prices.

The real after-tax average wage increased 2.5% in the year to March, after accounting for all consumer price increases including food prices and the one-off rise in GST last October, he said.

"Everyone's circumstances are different, and we appreciate things remain challenging for many New Zealanders. But it's encouraging to see that, on average, take-home wages continue to rise faster than prices," he said.

Food prices rose 0.5% in the May month, with fruit and vegetable prices rising for the first time since January and porterhouse and sirloin steak prices close to an all time high.

Coffee prices rose 5% in the month, and are up 15.9% over the year to their highest recorded level.

Fresh milk was up 9.3% in the year and porterhouse and sirloin beef steak rose 32.6% over the year, but that rise was influenced by discounting in May 2010, Statistics New Zealand said.

There was some good news, with fruit prices falling 5.7% in May. While they usually fall in May, the fall last month was the largest May decline since 2008.

Kiwifruit prices were down 61% and mandarins fell 41%.

Vegetable prices, which often rise in May months, were up 6.5% last month.

For the year to May, meat, poultry and fish prices rose 9.9%, with beef up 16.5%, lamb up 20.7% and poultry up 11.3%.

Fruit and vegetable prices were up 12.8% over the year, including a 28.9% gain in potato prices.

Labour finance spokesman David Cunliffe said the huge increase in the price of fruit and vegetables would not surprise struggling families, and reinforced the need for Labour's policy of removing all GST from fresh fruit and vegetables.

Grocery foods had made the most significant contribution to rising food prices.

"That's bad news for low and middle-income Kiwi families. While [Prime Minister] John Key's National Government has handed out thousands of dollars in tax cuts to the wealthiest New Zealanders, most families are finding it harder and harder to make ends meet," he said.

Green Party co-leader Metiria Turei said that for those families on low incomes and benefits, who were required to spend their whole income on necessities, it had become almost impossible to make ends meet.

"Putting fresh, healthy food on the table is out of the question for many."

Mrs Turei had started visiting food banks and community ministries around New Zealand to get a sense of the reality facing the country's "most vulnerable citizens" and see how service providers were coping with increased demand.

At a glance
• Food prices rise 7.4% in year to May.
• Fresh milk prices rise 9.3% in year.
• Fruit and vegetable prices rise 12.8% in year.
• Porterhouse and sirloin beef rise 32.6%. 



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