- Food prices have risen sharply since 2021, fuelling cost of living pressures and food insecurity.
- So what is the Australian government doing to ease the cost of a supermarket shop?
- Read more:
Amid allegations of price gouging, it's time for big supermarkets to come clean on how they price their products
First, how much have food prices increased, and why?
Food prices peaked in December 2022, with an average shopping basket costing 9.2% more than in 2021. Although food prices have eased since that peak, they remain significantly higher now compared to before the pandemic. Almost all food categories have been hit, but many healthy foods appear to have increased in price at almost double the rate of discretionary (unhealthy) foods.
- The COVID pandemic, climate events such as floods and bushfires, and international conflicts have all contributed, to varying degrees.
- These events have placed undue pressure on food supply chains through food shortages, increased fuel, energy and transport costs and a shortage of workers from farm to fork.
- This is against a backdrop of one of the most powerful and concentrated grocery sectors in the world, severely limiting competition.
So what is the government doing to ease the pressure?
- While many of these recommendations may indirectly influence food prices, only one explicitly addressed food prices: to provide subsidies for remote community stores so fresh food can be sold at an affordable price.
- In early 2024, the government announced an independent review of the Food and Grocery Code of Conduct to ensure the grocery retailers and wholesalers are dealing fairly with suppliers.
- This will have more teeth than other inquiries, allowing the ACCC to use legal powers to gather information, including from the supermarkets themselves.
- The pressure from the inquiry may also lead to supermarkets voluntarily lowering food prices, in a similar way to previous inquiries.
What are other countries doing?
- For example, the price of at least one type of bread would be lowered and advertised to shoppers at this lower rate.
- The Greek government has also provided low-income households with a monthly allowance to support grocery costs, among other measures.
What next for Australia?
- We need to recover from where we are, but we must do so in a way that ensures a more resilient food system with stable food prices over time.
- While it’s too early to know what will come of the various food price inquiries, the government is and should continue to provide general cost-of-living support.
- Unless the government steps up to ease the pressure, too many Australians will keep struggling to put food on the table.
Kathryn Backholer receives funding from the Australian Research Council, the National Heart Foundation, the United Nations Children's Fund, the World Health Organization, the National Health and medical Research Council, The Ian Potter Foundation, QUIT Victoria, and The Responsible Gambling Foundation. Christina Zorbas receives funding from the Victorian Health Promotion Foundation (VicHealth) and the International Food Policy Research Institute (IFPRI).
