Food Inflation in Australia
Pham Gia Khang NGUYEN - s3878629
11-6-2025
Introduction
- Using data from the Monthly Consumer Price Index (CPI) Indicator by ABS (2025)
- This assignment will specifically target grocery product in Australia annual movement (%)
- Identifying market shift and hopefully point outs some key findings
Overall Grocery Inflation Trend
Overall Swinging Pattern
- Overall inflation moves between 2.6% in 2024 to peaked at 3.5% in March 2025
- Reflecting an volatile cost-of-living trend
Uncertainty prices are the ‘new normal’ with persistent inflation despite brief slow-downs.
Food and non-alcoholic beverages
Overall Pattern
- Food & non-alcoholic beverages inflation down to 3.1% in April from the previous peak in March
- However, key product catergories trend show that an overall calm down does not means stablised market
Few keys categories with significant changes will be investigated ->
Fruit & Vegetables
Overall Pattern
- Annual inflation eased from 6.1% from peaked 7.6%
- ABS (2025a) notes that despite the recent eased, fruit & vegetable have montly rise of 2.5% in the observing period
These rises stem from surges in advocados, bannanas, red onion, pumpkins & potatoes prices (ABS 2025a)
Meat & Seafood
Overall Pattern
- Inflation peaked at 4.7% in January -> 2.5% in April
- ABS (2025b) noted that Meat & Seafood experience the largest annual increase in 2025 since the December 2022 quarter.
- Main driver for the peak is lamb and goat prices increasing by almost 20% in the past 12 months (ABS 2025b)
However, eased down in April maybe a sign of improving supply and softening seasonal demand lowering prices
Food products n.e.c.
Overall Pattern
- Other food categories picking up, with new peak in April 2025 at 3.6%
- ABS (2025A) noted on increasing high was driven by higher material cost for these product.
- For example:
- Snack & confectionery increase 5.4% due to higher cocoa cost
Egg shortage had driven a 18.6% increase
Dairy & Related Products
Overall Pattern
- Daily & related product experience a deep deflation to neutrality in the observing period (-0.9% -> +0.1% in Apr-24)
This is a rare ‘soft-spot’ holding down overall food inflation
Findings
Egg shortage
- Avian influenza virus causing the culling of 1.8 million birds (Hynninen 2024).
- Egg prices spiked up to 30% (McLeod 2025).
Meat and seafood prices increase
- Driven by lamb and goat prices (ABS 2025a)
- Increased exporter competition (MLA 2025)
- Processor shifting toward mutton (MLA 2025)
- Poor seasonal condition affect supply (Halter et al. 2025)
- Market uncertainty proven by shifting CPI (ABS 2025b).
Dairy Catergory Risks
- Current stability mask a looming pressure:
- Climate extreme, notably fllood in QLD and NSW (Bahr 2025)
- Declining farmer confidence (Twinberrow 2025)
- Increase reliance on import (Bahr 2025)
- These condition combined is treatening long term sustainability.
Fruit & Vegatble Market Practices Concern
- Fruit & vegatble peak raising concern:
- Coles and Woolworth is accused price-gouging, despite declining overall Fruit & Vegatble inflation (Vidler 2025;ABS 2025a).
- However, ACCC reports of no formal evidence of price-gouging, even though the term lack legal definition in Australia (Barrett and McLeod 2025)
Even with allegation cleared, consumer continued to be negatively impacted
Conclusion
Inflation is Fragmented
Inflation in Australia no longer a single headline number, but rather a combination of opposing forces.
For examples:
Supply Shocks
- Avian-flu, floods, drought and more production shortages pushes prices higher for every essentials.
Structural Pressure
- Exporter competition and processor shifts had add further price strain for meat and seafood
- While growing reliance for import milk pose future threats to Dairy products
External Forces from Supermarket
- Even where prices should eased, external overhead costs, like labour, weather, supply and demand, renting and operation from supermarket keep prices high for consumers
In Summary
- These findings show a cost-of-living landscape that is:
- Volatile, Uneven and Increasingly vulnerable.
- Calling a need for policy makers to address supply-chain resilience, farmer viability and retail transparency altogether.
Or else Australian consumers are the one who will face the consequences.