Australian Dietary Guidelines Price Indexes

Consumer Price Index (CPI) data has been used to construct new Australian Dietary Guidelines Price Indexes (ADGPIs) based on the 2013 Australian Dietary Guidelines (ADG) food groups. This updates work previously completed in 2015, which can be viewed here. 

The CPI is an important economic indicator. It measures changes in prices of consumer goods and services purchased by households in Australia's eight capital cities. The CPI and monthly CPI indicator publications include detailed price indexes and inflation data for food and beverage products.

The ADG provide evidence-based advice on the amount and types of food that Australians should eat for good health, maintenance of a healthy body weight and the prevention of chronic conditions such as heart disease, cancer and diabetes. Aligning CPI food and beverage data with the ADG food groups provides policy makers and researchers with an indication of price change for the ADG food groups. This suite of indexes has been produced with funding and support from the Department of Health and Aged Care and is not intended to be published on an ongoing basis. 

Further information on the ADG can be found at www.eatforhealth.gov.au. Interested readers may also wish to refer to relevant publications presenting dietary risk factor information from the National Health Survey and Apparent Consumption of Selected Foodstuffs.

The simplest way of thinking about the CPI and the ADGPIs is to imagine a basket of goods and services comprising items bought by average Australian households. As prices change, so too will the total price of the basket of goods and services. The CPI measures the changes in the total price of this fixed basket over time. The ADGPIs use a subset of the CPI basket to measure prices for products grouped to align with the ADG food groups. 

The CPI includes detailed indexes for a range of food and beverage products which are further grouped primarily around their type or main ingredients (e.g. the Cakes and biscuits index is combined with Bread, Breakfast cereals and Other cereal products to produce a Bread and cereal products index in the CPI). In consultation with the Department of Health and Aged Care, CPI data have been re-classified to the ADG food groups to produce the ADGPIs (e.g. Cakes and biscuits are re-classified as Discretionary for their nutritional value) for the purpose of this analysis. The ADG food groups used in the development of the ADGPIs were:

• Grain (cereal) foods; mostly wholegrain and/or high cereal fibre varieties
• Vegetables and legumes/beans
• Fruit
• Milk, yoghurt, cheese and alternatives, mostly reduced fat
• Lean meats and poultry, fish, eggs, tofu, nuts, seeds
• Discretionary food items (foods considered to be of little nutritional value and which tend to be high in saturated fats, sugars, salt and/or alcohol)
• Oils and unsaturated fats

For the purpose of this analysis ADG food groups refers to the first five core food groups, which are an important part of a healthy diet, as well as the two non-core categories of Discretionary and Oils and fats.

Examples of some of the products included in the ADG food groups are available in Appendix 1. Readers should note that not all foods could be readily re-classified to the ADG groups e.g. Restaurant meals and Take away and fast foods are analysed separately in Appendix 3, and are not reflected in the main article. 

Some CPI categories contain food items which correspond to two or more ADG food groups. Where this is the case, the CPI category has been placed in the ADG food group with the majority of spending. Examples of where this occurred are:

All figures presented in this paper are for the weighted average of the eight capital cities. Total price change between years are calculated using calendar year averages - e.g. price change between 2013 and 2023 is the change between the average price index for 2013 and the average price index for 2023. All figures are rounded to one decimal place.

Similar to the CPI, the ADGPIs measure the rate of price change rather than the price level and cannot be used to compare price levels between cities or groups. Selected CPI rates of price change are provided in Appendix 2 for comparison to ADGPIs.

The goods and services measured in the CPI are weighted based on their respective proportions of overall household expenditure. This means that changes in the price of products with higher expenditure weights, such as bread, will have a greater impact on the CPI basket than would the same change in the price of table salt. 

Similarly, smaller cities (in expenditure terms) are given smaller weights than larger ones. CPI and ADGPI weights are derived from the Household Expenditure Survey (HES), available on the ABS website, and updated as appropriate. In Inter-HES years, the Household Final Consumption Expenditure (HFCE) data from the National Accounts is used as the primary source for updating the weights.

It should be noted that changes in weights do not necessarily reflect changes in consumption patterns. For example, if the price of one product increased and nothing else changed, the weight for that product would increase (because expenditure on that product increased). Correspondingly, the weights for all other products would fall because the expenditure on those products would be a relatively smaller proportion of overall expenditure even though there had been no change in either their prices or their consumption. 

Discretionary food items account for over half of consumers' spending on food and beverages in all periods, whilst Fruit and Vegetables account for around 15%. The ADGPI weighting patterns differ from equivalent categories in the CPI Food and non-alcoholic beverages group due to the re-classification of products.

Prices increased in every ADG food group from 2003 to 2023. Oils and fats showed the largest increase from 2013-23 (+57.3%), while Grains and cereals (+18.9%) showed the smallest. 

The increase in Oils and fats was impacted by higher olive oil prices, along with higher butter prices due to low production volumes and high input costs for milk in 2022 and 2023. High milk prices also impacted Milk and alternatives, which had stronger price change between 2013-23 (+35.4%) compared to 2003-13 (+21.6%).

Meats and alternatives increased 42.2% from 2013-23, more than double the increase from 2003-13 (+16.7%), driven by increases across all meat products, particularly Beef and veal.

Average annual growth over 2013-23 was higher than 2003-13 for three of the seven ADG food groups. Meats and alternatives had the largest difference between the two decades, growing at 3.6% on average each year between 2013-23 versus 1.6% in the 2003-13 period.

Looking at the most recent period, 2021-23 saw high inflation and input costs impacting food prices. Particularly seen in Oils and fats, Milk and alternatives and Grains and cereals. However, the impact of high inflation and inputs costs has softened, leading to annual growth easing in 2023.

Selected CPI average annual rates of price change, from the CPI publication.

Restaurant meals and Take away and fast foods could not be included in the overall ADGPI analysis because many meals are combinations of multiple ADG food groups. For example, the ingredients for a ham and pineapple pizza can include bread, tomato paste, pineapple, cheese, ham, sauce, and oil. In other words, just one pizza can have elements of every ADG group. Thus, analysing price change in Restaurant meals and Take away and fast foods within an ADG framework is impractical. Although Restaurant meals and Take away and fast foods are not applicable to the ADG food groups, they represent a significant portion of consumers' spending on food and beverages. If they were included in the ADGPI weights comparison, they would make up approximately 30% of the total. As such, they warrant an individual analysis. 

Expenditure on Restaurant meals made up a significantly larger proportion of overall food expenditure in 2023 than it did in 2003.

Prices in Restaurant meals and Take away and fast foods have grown at a similar rate to CPI.