Rising food prices can make it hard for low-income shoppers to get enough healthy food, experts say.
Stats NZ said this week food prices were 8.3% higher in August 2022 than in August last year. It was the largest annual increase since July 2009, when food prices increased 8.4%.
A dairy and consumer foods analyst from Rabobank. Michael Harvey, said if food inflation remained high for very long and kept affecting how much discretionary income households had, lower-income consumers would find it hard to maintain a healthy diet or buy sufficient food.
Many consumers responded to food inflation by “trading down”, he said, and buying cheaper options.
Some began buying bulk foods. Others reduced eating out, he said. Some would buy more canned goods.
But trading down was different across income levels, he said.
These were different stages that especially lower-income consumers went through before they came to a place where they skipped meals, Harvey said.
A 2014 Auckland City Mission report showed that the only expense families from lower-income households had any power to reduce was their weekly grocery shop. These families only shopped for food after their rent, debts and utility bills were paid.
Professor of public health nutrition at Massey University, Carol Wham, said there were anecdotes of rising food prices compromising the food choices consumers made.
There would not be hard evidence to substantiate this until a proposed next national nutrition survey was completed.
Milk was a good example of food that was excluded because of price. Rising costs mean that per capita milk consumption was low amongst those who may needed it most, Wham said.
Cheap ultra-processed foods, such as instant noodles, displaced nutrient-dense whole foods. This was a key contributor to obesity, Wham said.
Consumer resistance to food prices was part of the rebalance of a market, Harvey said. But there were many factors that affected food prices that shoppers could not influence.
A key factor was agriculture commodities, like milk or vegetables, now being expensive to produce due to the rising cost of diesel and fertiliser, he said.
Political events also had to stabilise, he said.
There were high costs throughout the entire food value chain. Even costs to package or process food were high, he said.
Food companies had passed on higher costs to consumers for the last six to 12 months. But companies’ margins were also being squeezed, he said.
Some retailers reported that they passed their costs on to consumers, but did not make more profit from it, Harvey said.