Food prices increased by 5% in the 12 months to July 2025, after a 4.6% rise in the year to June, according to figures released today by Stats NZ.
Higher prices for the grocery food group, up 5.1%, contributed the most to the annual increase in food prices. On a monthly basis the category rose by 0.7%.
The change was driven by higher prices for milk, butter, and cheese.
“All five food groups recorded higher prices when compared to this time last year,” Stats NZ prices and deflators spokesperson Nicola Growden said.
The average price for a two-litre bottle of milk has risen 16% annually to $4.70, a 500g block of butter is up 42.2% annually, and a 1kg block of cheese has increased by 29.5% annually to $13.01.
The average prices for milk, butter, and cheese reflect the cheapest available option for each, according to Stats NZ.
“The price for 2 litres of milk has increased 33.9% since July 2020.
“In the 12 months to July 2025, milk prices contributed more to the increase in overall food prices than any other food item.”
Dairy prices have been in the spotlight for several months, with the latest Global Dairy Trade auction, which decides global prices, increasing 0.7% on August 6.
Prices for the meat, poultry, and fish group were up 7.9% annually (up 1.4% monthly). The category was the next largest contributor to the annual increase in food prices, and was driven by higher prices for beef steak and beef mince, up 24.6% and 19.3%, respectively.
Growden said that the average price for one kilogram of beef mince costs $21.97 in July 2025, about $3.50 more compared to last year.
As for the other food categories, fruit and vegetable prices are up 7.3% annually (up 4.3% monthly), restaurant meals and ready-to-eat food are up 2.2% annually (up 0.1% monthly), and non-alcoholic beverages are up 4.4% annually (down 0.6% monthly).
In the non-food categories, rent prices increased 2.4% in the 12 months to July 2025, following a 2.6% increase in the 12 months to June 2025.
Growden said prices are still increasing, but at the slowest rate since 2011.
Cigarettes and tobacco prices are up 4.8% annually, while alcoholic beverages are up 0.9% annually.
In transport, petrol prices are down 3.7% compared to this time last year, with diesel prices down 7.2% annually.
Domestic air transport costs are down 5% on an annual basis, however international air transport costs are up 7.1% annually.
The Labour Party has criticised the Coalition Government following Stats NZ’s announcement, with its financial and economy spokesperson Barbara Edmonds saying that the cost of living keeps getting worse under National.
“Christopher Luxon promised to make the cost of living better, instead he’s making it worse,” Edmonds said.
“Food prices are up 5% under National. Everyday necessities like milk and butter are up 16% and 42% respectively. Fruit and vegetables are up more than 7%, with lettuce and cabbage up 38% and 61% respectively. Beef is up nearly 25%.
“National has found a way to help property speculators and tobacco companies, but is failing to bring down costs for everyday New Zealanders.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.