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Gap Between Reality And Perception When It Comes To Food Prices

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Fuseworks Media
Fuseworks Media
Katherine Rich
Katherine Rich

Today's release of the Food Price Index (FPI) is a timely reminder of the gap between reality and perception when it comes to food prices with Statistics New Zealand headlining their statement "Food prices record largest annual fall since 1957", says Food and Grocery Council Chief Executive, Katherine Rich.

"The FPI shows that food prices fell 2 per cent for the year to June 2010. Fruit and vegetables, meat, poultry, and fish, and grocery food are all cheaper than they were this time last year. This news comes days after consistent media suggesting that food prices are out of control."

"As Statistics New Zealand notes food prices have been falling since July last year. Some will point to the monthly increase in fruit and vegetable prices (up 15.9 per cent from May), but as Statistics New Zealand states this is due mainly to seasonal factors - winter growing conditions."

"We also suspect that the fall in groceries has a lot to do with the intense competition between the two supermarket chains and the competitive discounting that has been occurring on many grocery items". Mrs Rich says that while there will be month to month fluctuations in food prices it is the longer-term trend, which is important to keep a close eye on. This longer-term trend very clearly shows that food prices have been on the decline for the last year.

"While there has been an increase in some dairy products, this simply reflects improving international commodity prices. The prices we pay here for all our food products will always be influenced by the value of commodities internationally, as our local producers seek the best price for their products." Mrs Rich says that the latest FPI data highlights that New Zealanders spend 14 per cent of the total grocery bill on fruit and vegetables, and approximately 16 per on meat, poultry, and fish while at the same time spending close to 21 per cent (20.88 per cent) on restaurant meals and ready-to-eat food.

"Research by Statistics New Zealand also shows that there has in fact been no change in the proportion that a family spends on their weekly food shopping for over 30 years. The idea that food prices have been spiralling out of control is just not borne out by the evidence." Mrs Rich said.

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