The cost of living crisis is continuing with the latest stats showing record figures for food prices in New Zealand.
Stats NZ released their latest data on Wednesday, which showed food prices were 7.6 percent higher in March 2022 compared with March 2021, the highest annual increase in over 10 years.
The increase in food prices was widespread, with fruit and vegetable prices increasing 18 percent, meat, poultry, and fish prices by 8.7 percent, grocery food prices by 6.7 percent, restaurant meals and ready-to-eat food prices by 5.1 percent, and non-alcoholic beverage prices by 2.7 percent.
"Average prices for vegetables like tomatoes, broccoli, iceberg lettuce, and cabbage were notably higher than they were in March 2020 and 2021," 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."
Inflation also increasing
The high food prices aren't the only thing breaking records, with ASB saying the higher food prices and rents should help push the annual consumer price index (CPI) for inflation to above 7 percent in early 2022.
"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 food price inflation is on track to hit 7 percent," ASB senior economist Mark Smith said.
"Annual CPI inflation is expected to move above 7 percent in early 2022 (we have a 7.3 percent Q1 print pencilled in), the highest since 1988.
"The signs high inflation outcomes are broadening and may increasingly be more persistent. Our CPI forecasts have annual inflation ending 2022 above 6 percent, with annual inflation not back into the 1-3 percent 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 March food prices were up 0.7 percent month on month (mom), up 3 percent quarter on quarter, and 7.6 percent year on year (yoy).
"Fruit and vegetables rose 1.2 percent (18.3 percent yoy), influenced by higher prices for cabbage, tomatoes, strawberries, and kumara," he said.
"Meat, poultry, and fish prices rose 0.9 percent, with monthly annual inflation from this group (8.7 percent yoy) the highest in a decade."
"Grocery food prices rebounded 0.9 percent (6.7 percent yoy) the highest annual inflation in a decade. Strong gains were evident for wheat-based products."
Food prices rose 3 percent in quarter one, which is the largest quarterly rise since 2008.
Rentals are continuing their "volatile run", rising 0.9 percent in March, with annual rental inflation easing to 5.8 percent.
"Rents for the stock measure (more compatible with the CPI rents component) rose 0.4 percent mom, with the quarterly increase of 1 percent in Q1.
"Dwelling rents tend to follow house prices with a lag (see chart) and the cooling housing market points to a moderation in rental inflation.
"However, the risk is that elevated rates of headline inflation (which are commonly used to index rental increases) results in high rates of dwelling rental inflation going forward."
Govt blames increase in food prices on supermarket duopoly
The Government is blaming the latest increase in food prices on the supermarket duopoly.
Commerce and Consumer Affairs Minister David Clark says the latest figures on rising food prices confirm the need to rein in the "super-profits" of New Zealand's supermarket duopoly
"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," Clark said.
"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."
Clarke said "no matter how you cut it", 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.
Opposition parties slam Labour for the continued cost of living crisis
ACT has slammed Labour for the skyrocketing food prices saying it's game over for the reasoning that "inflation comes from overseas".
"The Government's argument that New Zealand's rampant inflation isn't caused by their irresponsible spending has gone up in smoke as food prices have recorded their highest annual increase in the last decade," ACT leader David Seymour said.
ACT said the Government's "war on businesses" and "relentless" borrowing and spending have fuelled domestic inflation.
"Grant [Robertson] and Jacinda [Ardern] are so focused on the PR spin around cost of living and blaming global events like the war in Ukraine that everyday New Zealanders who are struggling to make ends meet are getting forgotten," Seymour said.
"They deserve straight talk and common-sense solutions rather than disingenuous spin designed to distract from the mess they've created.
"Economics 101 shows that when costs increase they will be passed on to the consumer, and Kiwis are feeling this at the grocery shop, the fuel pump, the increasing cost of rent and mortgages, and even in retail shopping."
National also criticised the Government for overspending saying the cost of living crisis is only getting worse on Labour's watch.
"These numbers confirm what Kiwis already know: New Zealand is experiencing a worsening cost of living crisis, with prices running laps around wage growth," National's finance spokesperson Nicola Willis said.
"Meanwhile the Minister of Finance [Grant Robertson] 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."
