According to data released by the Australian Bureau of Statistics, the cost of groceries rose by 3.6% in 2005, above the 2.8% inflation rate. This trend was mirrored in the December quarter, with the consumer price index showing a rise in the cost of food of 1.8% when the rate of general inflation was just 0.5%.

The rise in food prices can be attributed to an increase of 6.8% in the cost of vegetables and 5.8% increase in the price of fruits. Dairy products saw large increases, with consumers paying 6.2% more for cheese by the end of the year while milk prices rose by 5.9% throughout the year.

However, the price of lamb and mutton declined by 2.5% and food additives and condiments were 1.7% cheaper, providing minor offsetting price falls.

According  to the Bureau, adverse weather conditions were responsible for the increasing cost of fruit and vegetables, while higher fuel prices affected a number of food categories including milk, bread, restaurant meals and take away and fastfoods.