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Speaker 1: Got some new numbers around the cost of your groceries

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Speaker 1: year on year. Here's the claim. Year on year inflation

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Speaker 1: for comparable products has remained flat zero percent. So if

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Speaker 1: there's a mismatch, the argument is then we you know,

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Speaker 1: when we make international comparisons, the fingers being pointed at GST.

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Speaker 1: For example, in Australia they have some GST food free food.

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Speaker 1: We don't hear food stuff to New Zealand Managing director

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Speaker 1: Chris Quinn is with us. Chris, very good morning to you.

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Speaker 1: This ongoing thing that I think is a media thing

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Speaker 1: that we go, oh, look, I can buy some oranges

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Speaker 1: in London so much cheaper. Is there any point in

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Speaker 1: that given their different markets, different products, different times, different currencies,

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Speaker 1: et cetera.

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Speaker 2: I think that's an important discussion because there's so many

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Speaker 2: differences in what makes up the cost of food. You know,

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Speaker 2: Basically in New Zealand, a dollar of retail on shelfs

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Speaker 2: about two thirds the cost of the product from suppliers

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Speaker 2: about thirteen cents GST, and then the rest is the

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Speaker 2: cost for us to run our business and pay thirty

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Speaker 2: nine thousand people across the country. So it's important when

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Speaker 2: comparisons are made that. Factors like the fact that New

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Speaker 2: Zealand has a very simple tax system where gest is

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Speaker 2: charged on everything. That means it's a low cost system

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Speaker 2: to make work, and that you have to take it

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Speaker 2: in context of overall tax all matters when you try

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Speaker 2: to compare food price.

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Speaker 1: Yeah, difficult with that is that people don't here's the

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Speaker 1: first text, Mike. I'm astonished that it's noted that food

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Speaker 1: is not going up in Woolworths alone. I've seen increases

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Speaker 1: of fifty cents to a dollar in a lot of

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Speaker 1: items are regularly by in the last two weeks. That's

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Speaker 1: what people see, isn't it what was in their basket,

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Speaker 1: not an average basket.

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Speaker 2: That is correct, and that's why the comparison that we

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Speaker 2: do that saw us have a result in September of

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Speaker 2: zero percent compared to zero September a year ago, is

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Speaker 2: based on the FDI basket, the Food Price Inflation basket

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Speaker 2: from the Department of SATs and we follow their basket

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Speaker 2: because it's the one they publish. So for New Zealand

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Speaker 2: overall that was one point two For food stuffs that

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Speaker 2: was a zero month, and for the cost of those

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Speaker 2: goods to us up about three percent in the month.

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Speaker 1: Ah, so that brings in the supplies before I say

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Speaker 1: something about the supply, So you look at olive oil,

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Speaker 1: for example, that's up fifty eight percent, that's that's I mean,

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Speaker 1: there's a lot of stuff that needs to go down

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Speaker 1: to officit. Something that's gone up fifty eight percent. That's fair,

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Speaker 1: isn't it.

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Speaker 2: That's right? And also you've got to weight the volume

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Speaker 2: somehow to a basket so that you get effect on

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Speaker 2: what does it cost me to go shopping, which is

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Speaker 2: what New Zealand households care about.

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Speaker 1: Which is the really interesting thing since we've last had

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Speaker 1: you on the program, the Comcom's rule, But we've also

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Speaker 1: got the supply situation. Is the supply situation broadly under

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Speaker 1: control now?

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Speaker 2: In terms of supply, yes, it is. So we're getting

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Speaker 2: good supply and we're able to get shelves are full

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Speaker 2: and looking a lot better than they might have a

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Speaker 2: year and a half or two years ago. What about

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Speaker 2: price in terms of in terms of supply costs, they

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Speaker 2: are continuing. You know, we're still getting three thousand or

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Speaker 2: so price increases a month, but they are more like

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Speaker 2: two to three percent than some of the numbers we've

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Speaker 2: seen over the last year or two. So we think this,

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Speaker 2: you know, the feeling that it's going to settle somewhere

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Speaker 2: around a two in terms of price trend is stronger

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Speaker 2: and stronger.

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Speaker 1: Okay, how many of those so, how many of those

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Speaker 1: increases that you talk of are because they say, oh, well,

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Speaker 1: it's the red sea, I can't do anything about it,

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Speaker 1: as opposed to the person going, I just feel like

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Speaker 1: charging more.

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Speaker 2: Look, there is a lot of pressure on cost globally.

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Speaker 2: So you mentioned you know, olive oil is one that's

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Speaker 2: up nearly three times in the last couple of years.

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Speaker 2: You know, coco that goes into chocolate. Those sort of

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Speaker 2: things definitely had been under global price pressures, the global

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Speaker 2: events and all of the things that make that up.

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Speaker 1: Okay, and then we come to the merger. It's off.

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Speaker 1: What are you going to do?

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Speaker 2: Look, that was one of our best plans in terms

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Speaker 2: of how we further reduce cost and reduce food price.

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Speaker 2: There was huge benefit and the removal of duplication in

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Speaker 2: that proposal. We don't know the reasons yet why the

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Speaker 2: Commerce Commission have declined it. We don't get that till

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Speaker 2: the twenty third of October. We'll review that properly and

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Speaker 2: based on what we see there will de side on

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Speaker 2: a next step and whether we feel there are reasons

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Speaker 2: there why we failed the legal two or if there

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Speaker 2: isn't then we have the option to appeal.

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Speaker 1: All right, we'll talk about it, saying I'm sure Chris

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Speaker 1: appreciate it. Chris Quinn, who's The Foodstuff's New Zealand managing directory.

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