Food prices fell for a fourth month straight in December, led by a drop in non-alcoholic beverages which offset higher meat, poultry and fish prices.
The Food Price Index fell 0.2 per cent in the month, according to Statistics New Zealand following a 0.8 per cent decline in November. The current level of 1243 marks the lowest point on the index in almost two years.
Prices manager Chris Pike said heavy discounting among retailers over the holiday period saw the price of non-alcoholic drinks fall 2.8 per cent, lead fruit juices (down 6.1 per cent), coffee (down 5.6 per cent), and soft drinks (down 2.6 per cent).
The reverse was true of typical barbecue fare, with the removal of discounts seeing chicken prices gain 10 per cent in the month. Pike said this was balanced out by the cost of lamb, which fell 14 per cent to its lowest since February 2009.
In the December month, fruit and vegetables rose 0.7 per cent, with apples (up 14 per cent), potatoes (up 13 per cent) and kiwifruit (up 28 per cent) the main contributors.
The main downward contributions came from seasonal falls in tomatoes (down 30 per cent) and broccoli (down 31 per cent).
Tomato prices, which often fall in the spring and early summer months, have fallen 30 per cent in each of the past three months and are now 75 per cent lower than their offseason peak in August 2012.
On an annual analysis, food prices dipped 0.1 per cent in the year to December 2012, with grocery food (down 3.6 per cent) the main downward contribution.
Other major downward contributions came from fresh milk (down 9.4 per cent), cheese (down 8.2 per cent), and bread (down 4.2 per cent).
The price of lamb fell 24 per cent in the period, largest annual fall since the series began in January 1989.
The biggest upward contributions came from fruit and vegetables with a gain of 6 per cent, with Kumara prices up 109 per cent and avocado prices up 107 per cent.
Pike said kumara prices were influenced by poor weather conditions in both the planting and harvesting seasons, which affected the crop in 2012.