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More action needed on excessive food hikes.

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Senator John Cherry Australian Democrats Agriculture Spokesperson

July 15, 2003 MEDIA RELEASE 03/512

More Action Needed on Excessive Food Hikes More action is needed by the Australian Consumers Association and Government agencies to deliver fairer food prices in light of the finding by a Choice magazine survey that “there is little price competition” between supermarkets, according to the Australian Democrats.

Democrats’ Agriculture spokesperson Senator John Cherry said food prices were rising almost twice as fast as the price of all other goods and services, putting pressure of the family budget.

“In the last three years food prices have risen 16%, nearly twice the 8.8% price rise for all other goods and services, yet farmers are getting poorer prices for their produce,” Senator Cherry said.

“It is particularly scandalous that the food item with one of the biggest rises in price was milk, up 4.2% in the last year, and up 10.4% over the past two years despite the deregulation of the dairy industry.

“Food prices rose in the three months to December by 1.4%, three times the rise of all other goods and services (0.46%).

“That capped off a bad two years for Australian consumers, which saw food prices rise by a total of 10%, compared with just 5% for other goods and services,” Senator Cherry said.

“Food prices in 2001 and 2002 rose by twice the rate of all other goods and services, and five times the rate when the impact of higher housing costs is excluded.

“The CPI also shows that the share of household income that Australians are required to spend on food has also risen sharply, from 22.35% in June 2000 to 25.24% in December 2002.

“The rise in food prices is clearly putting pressure on household budgets and it is time for the ACCC and the Federal Government to act to get to the bottom of what has been going wrong in the food chain to make sure that farmers and consumers are getting a fairer deal,” Senator Cherry concluded

Media contact: Pam Hose 0408 752 750