Food prices have taken a serious hit in Australia since the COVID pandemic began. Average restaurants in larger cities have increased their menu prices by 20% to 30%.
High Cost of Basics
A Taiwanese restaurant owner, Alan Chu, says food items costs have hit the roof. He explained by saying small lettuce now goes for between A$10 to A$12. His restaurant, known for cheap meals, is no longer so.
Alan also said one of the challenges businesses face due to inflation is high wages. He shared the blame with the COVID pandemic too. It is really difficult for businesses to keep going, he concluded.
There has been a high rate of floods on the country’s east coast. The floods destroyed crop yields and added to the food crisis. This contributed to increasing the cost of food items.
For context, lettuce used to sell at A$2.90 when things were right. The same item now sells at roughly A$12. Prices rose by as much as 350% before reducing and rising again.
Food prices are rising in Australia faster than most goods. Vegetables and fruits added 18.6% two months ago in comparison to last year. The Australian Bureau of statistics made this available in its recent update.
The prices of non-alcoholic beverages rose by 9.3% within 12 months. And prices increased that way throughout most food classes according to reports.
Australia is facing an unprecedented cost of living crisis like most countries. The country’s annual inflation hit 6.8% in August from below 2% before COVID. Food inflation, then, was also low at 1.3%.
Inflation Will Rise Higher
Chris Lam, a grocery, testifies to the price spike, saying it is high this year. Lam said supply-chain disruptions from the pandemic made it worse. It is also pushed higher by the Ukraine war which affected the energy supply.
According to Lam, the biggest increase was in cooking oil and rice which are imported. As a result, many consumers in Australia are cutting their spending patterns.
Finder, a personal finance tracker in Australia has been at work since. It said high prices have beat down income growth since the beginning of the pandemic.
Finder said the cost of veal and beef also increased by 33% within a year. The price of staples such as milk and eggs has gone up by about 12%.
The cost of petrol has also gone up by more than 30%. A Finder expert said he was shocked to buy a pot of tea for A$6.70.
The Australian government has warned that inflation might keep rising till it reaches 7.75%. Economists say Australia can cope with inflation of up to 8%. Some say the government should increase tax on fuel and proceeds used to cut service costs.