The Green Party is calling for an excess profit tax on supermarkets after new data revealed food prices are more than 12 percent higher this year.,
Data from Statistics NZ, released on Monday, shows food prices were 12.1 percent higher in March 2023 than in March 2022.
There were annual increases across the broad food categories Stats NZ measures with grocery food prices increasing by 14 percent and fruit and vegetable prices increasing by 22.2 percent.
The second-largest contributor to the annual movement was fruit and vegetables which was driven by tomatoes, potatoes and avocados.
Restaurant meals and ready-to-eat food prices also increased, up 8.7 percent. While meat, poultry and fish saw an increase of 7.8 percent. Non-alcoholic beverage prices increased by 8.2 percent.
Monthly food prices rose 0.8 percent in March compared with February, and after adjusting for seasonal effects, they were up 0.5 percent.
Green Party spokesperson for commerce and consumer affairs Ricardo Menéndez March said the evidence for an excess profit tax "could not be clearer.
"The cruel truth is that food price rises driven by supermarket profiteering are making it harder and harder for people to afford to eat," Menéndez March said.
"Over the last 12 months, grocery food prices increased by 14 percent, while the price of fruit and vegetable prices increased by 22 percent. The data comes only a few days after reports that supermarkets are marking prices up by up to 55 percent on essential items like vegetables."
He said supermarkets are increasing prices on basic goods people need to survive.
"Lower-income families spend most of their income covering the essentials like food and are hit the hardest," he said."Meanwhile, the two largest supermarket corporations in Aotearoa are making $1 million in profits per day."
Menéndez March said the Government needs to urgently step in and tax excess supermarket profit and use the money to help people.
"Not only this, but we need the Government to get on and pass the Grocery Competition Bill without delay. We're also long overdue a serious look at the need to force supermarkets to divest their subsidiary companies.
"We also need longer-term solutions, such as ongoing investment in initiatives like urban food gardens and a long-term food strategy to ensure the people, rather than the demands of global markets and profit-hungry corporations, are at the heart of food systems and policies."
It comes after a group of New Zealand grocery suppliers revealed the price they sell their goods to the major players for. Newshub compared that to the price you pay in the shop and in some cases it is doubled
Forty-six different small to medium-sized suppliers who sell food to both Foodstuffs and Countdown told Newshub the supermarkets are making up to a 55 percent gross profit margin on a product.
One lettuce grower Newshub spoke to said he would sell one for $3, but in-store consumers would pay more than $6 for that same lettuce.
The highest supermarket margins Newshub found were in dairy products, fresh produce, and organics.
But there is a huge range - the lowest profit margin Newshub heard of was 20 percent. That particular supplier was selling a dry-packaged product with a very long shelf life.
The vast majority of these small to medium-sized suppliers were seeing a supermarket profit margin on their product of between 30 percent and 40 percent.
In response Foodstuffs told Newshub, "We agree that with inflation at record levels and recession looming, value is critical for New Zealanders.
"The costs of goods from suppliers are the largest cost to our business, making up 68 cents of every retail dollar on shelf."
Meanwhile, Countdown said it's not making too much off Kiwis.
"The gross margin we reported in the half-year profit and dividend announcement was 25.2 percent," they said.
From that, they have to pay for "running our stores, paying our team and operating our supply chain".
"Our absolute priority remains making sure the food on our shelves is as affordable as possible for our customers."
A Commerce Commission study published last year found the supermarkets bank $430 million in excess profits a year, double what the commission considered they should be making - though the supermarkets dispute that
The Government has promising to reign in those profits identified by the Commerce Commission
"They're going to have to take steps to make sure they're conducting themselves in a reasonable manner, where the profits they're making are reasonable - and no more," said Commerce and Consumer Affairs Minister Duncan Webb.
A new law is going through Parliament that would bring in a code of conduct, open up wholesale supply, and create a Grocery Commissioner.
