GST increase pushes food prices up

The GST increase saw food prices jump 2.2% last month with fruit and vegetables leading the way, according to Statistics New Zealand. 

This is an unusual trend as fruit and vegetable prices usually fall in October.

Statistics New Zealand prices manager Chris Pike said the 4% increase, apart from bad weather in September, is due to the GST increase to 15%.

Overall food prices rose 2.2% in the October 2010 month.

"About two in every five food prices collected in October 2010 increased by 2.0% to 2.5%, once prices affected by discounting were excluded," Mr Pike said.

Prices for broccoli and cabbage recorded the highest increase last month, while potatoes, carrots, and apples saw usual seasonal increases.

While lettuce is still more than double the price it was this time last year, it saw the largest drop last month followed by cucumber and strawberries.

Grocery food prices rose 1.7% with higher prices for cakes and biscuits (up 4%), cheese (up 4.6%), and fresh milk (up 2%).

For undiscounted grocery food prices one in two rose by between 2% and 2.5%. One in 10 prices rose by between 2.5% and 5%, while one in six recorded no price change.

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