Food prices up, bread stays same - FGC media response

17 February 2015

The NZ Herald asked FGC to comment on a Statistics NZ report on food price inflation. It showed that while prices of lamb, beer, milk, fish & chips, and apples all increased between 2009 and 2014, the price of bread remained the same at $1.80 per loaf. 

The Herald asked: From the council’s perspective, are these price increases fair?

Katherine Rich’s response was: “While the price of some goods has risen due to inflation, in some categories there has been price deflation as a result of tough negotiations and retail discounting. Dollar bread has stripped millions and millions of dollars of value out of the bread category. Shoppers benefit but suppliers either make very little or actually lose money on this business. In the long term this will affect reinvestment and innovation in the New Zealand market.  Many in the industry believe it’s not sustainable. Who knows what Countdown’s thinking was. It launched dollar bread and within a few hours this was matched by PAK’nSAVE so there was no competitive advantage. But the effect on the bread category has been massive. Consumers have benefited, but there is a long-term cost.”   

FGC also sent the NZ Herald a link to an opinion piece about cheap bread in Australia, suggesting it foreshadowed concerns in New Zealand. Go to that story here.

On 18 February, the Herald published an odd story which had little to do with food price inflation, and used only the quote about dollar bread stripping millions of dollars of value out of the bread category. See the story here.