John Murphy: Vegetables NZ chair says supplier cost increases to supermarkets still rising, but trend is below overall inflation

Supplier costs increases to supermarkets have continued to rise.

Infometrics-Foodstuffs New Zealand Grocery Supplier Cost Index shows a 2.1 percent increase in supplier costs to supermarkets in November, compared to the year prior.

Some of the largest rises were for chocolate and cooking oils.

Vegetables NZ Chair John Murphy told Andrew Dickens there's still some general inflationary pressure – but the trend is below overall inflation.

“So you see the likes of diesel and things like that starting to creep in, which affects those freight costs.”

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Episode Transcript

Speaker 1 (00:00):
The latest Infometrics food Stuff's Grocery supply indexes out. In
the year to November, supplier costs rose two point one percent.
Now that's slightly up from October, which saw an increase
of two percent. Remember it's still more expensive. It's two
percent more expensive. In November, almost three and a half
thousand items increased in cost compared to October, and that's

(00:22):
the largest single month increase since July. John Murphy is
the chair of Vegetables New Zealand and joins me. Now,
good morning to you, John.

Speaker 2 (00:28):
Merry Christmas, Mate, Merry Christmas to you too, Andrew.

Speaker 1 (00:31):
So what does this mean for Christmas dinner?

Speaker 2 (00:35):
It means there's plenty of good produce available and so
we've seen really good supply of fresh vegetables really for
the last few months. To be honest and fantastic, boy
of the consumers look a little bit tough on some suppliers,
but we're delighted and be able to get sweet corn
and all kinds of salads. And before they even start

(00:57):
looking at the berries and everything like that that are available,
it looks really good.

Speaker 1 (01:00):
So talk to me about the supplyer cost as well.
Supply cost is two thirds of the price increases. The
prices have gone up two point one percent, where are
they getting squeezed in their costs?

Speaker 2 (01:13):
Look, I think that there is still some general inflationary
pressure that you see, and so you see that lots
of diesel and things like that's starting to creep in,
which affects those freight costs that you've been talking about
this morning with theories and everything as well. So there
are still general costs, but the general trend is below
general inflation, i'd say as well. So yeah, I think

(01:34):
the key thing here is that there's still very good
buying available, and particularly in the produce area, which I
sees around one point five percent for the year. That's
got to be seen as a successful consumers.

Speaker 1 (01:46):
I think that's the second time you've said that, so
I know what you're saying. You're saying by local, aren't
you really? Because global production is still low, so there's
loads of inflation there. So you know, don't buy yourself
a French mushroom, buy yourself a New Zealand one.

Speaker 2 (02:00):
Absolutely absolutely. Look, I think that the general rule is
if you buy what's abundant, what's available, then you'll do well.
And that's buying the big ticket items at the front
of the supermarket really, and that's also good for consumers
because it reflects what's abundant and available and that's what
we've got.

Speaker 1 (02:19):
To sell absolutely, John, Look, Merry Christmas and what are
you going to have for Christmas dinner?

Speaker 2 (02:27):
Look, we'll be getting into all kinds of salads alongside
the traditional ham as well. And then back Meanderson Buriers.

Speaker 1 (02:35):
Of course you had I forgot your vegetable New Zealand chair.
You're going to have an awful lot of salads. I
wouldn't be surprised if you weren't a vegetarian. John, I
thank you so much for your time today.

Speaker 2 (02:44):
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