Grocery Prices – gone up or gone down?

There was much coverage this morning in the Irish Examiner quoting from a CSO report about the price of groceries since the dropping of the Groceries Order last year. The gist of the article was that groceries prices have increased 16% since the removal of the Groceries Order.

There was a press release later today from the Competition Authority (who themselves supported the removal of the Groceries Order). I don’t really understand what they’re saying – have prices gone up or gone down. See if you can work it out. Here’s the contents of the press release.

It’s no wonder people don’t really care any more when they’re presented with this kind of information.

Abolition of Groceries Order has been good for consumers

Media reports today that food prices have “soared” since the abolition of
the Groceries Order are not borne out by official data from the Central
Statistics Office which show that in fact the opposite is the case.

Since April 2006, CSO figures show that prices of items covered by the
Groceries Order have fallen by 1.5% to their lowest level since December 2002.
Over the same period prices of items that were never covered by the Groceries
Order such as fresh meat, vegetables and fish have risen by 2.3%.

The price figures cited by the survey conducted by the Irish Examiner today
14February 2007 are based on sub-set of the grocery items checked by the CSO (73
items). But in fact the basket of consumer goods and services used to calculate
the monthly inflation figure comprises a total of 613 items. Some items are
further broken down into different varieties and in total over 1,040 different
varieties are included in the basket.

In its Consumer Price Index Press Release of 18 January 2006, the
CentralStatistics Office states that: “There has been a particular focus on the
removal of the Groceries Order and its effect on the CPI in 2006. The repeal
took effect from March 2006 and the first month in which post Groceries Order
prices were collected for the CPI was April. Bearing this in mind, it can
nonetheless be seen that items previously covered by the Groceries Order showed
an increase of only 0.1% in 2006, while groceries items which were never covered
by the Groceries Order increased by 2.4% in the year. This is a reverse of the
trend in the three years prior to the repeal of the Groceries Order, where
Non-Groceries Order items showed lower inflation than those covered by the
Groceries Order.”

This statement is based on the price data reported by the CSO in its
monthly Consumer Price Index press release, specifically “Table 21” of that
release. This table shows monthly price levels for items covered by the
Groceries Order and those not covered by the Groceries Order.
According to the Chairperson of The Competition Authority, Mr Bill Prasifka said today “The Competition Authority has a continuing role in monitoring the grocery sector and we believe it is important that we use the most robust data available based on a sound methodology.”

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