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Red hot ice cream price

Alastair Ellerington analyses the possible causes behind the shocking rise in ice cream prices

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Photo Credit: Roboppy
Photo Credit: Roboppy

The sparse days of recent sunshine mean that summer has now officially arrived, and if the remarkable change in TV adverts is anything to go by, we can expect a general price inflation for all things plastic, colourful and vaguely relevant to a beach scene.

Most notable though is the yearly trend of increasing ice cream prices. Earlier this year British tourists were charged £54 for four ice creams in a Rome gelateria, whilst last year Time Magazine's reported on 'The Summer of the $5 Ice Cream' . This was preceded by record high prices of raw ingredients in 2004.

Statistics New Zealand offers a useful insight into just how dramatic these changes have been. Between March 1981 and September 2010, ice blocks rose in price by 768 per cent, whilst novelty ice cream prices rose by 581 per cent. This reads for a staggering average annual rise of 7.6 per cent and 6.7 per cent respectively. Meanwhile, New Zealand's annual inflation rate has been consistently below 5 per cent - hovering generally around 3 per cent - since 1991.

So is the consumer being ripped off? The Time Magazine article disagrees, highlighting the original causes of the $5 ice cream, linking it mainly to bad harvests. Rising global demand for sugar is quoted alongside milk, which since 2000 has risen at farmgate prices from 18p per litre to 28p, though inflation can account for most of this.
Moreover, it's clear that whether in New Zealand, the US or the UK, the price of ice cream cannot be simply due to bad harvests or inflation. Rising demand globally was to blame, but 'SNZ' further notes most increases have come since the recession.

The increased price can also be attributed to changing trends, as consumers are increasingly willing to shell out for higher quality, premium brands.
Students seeking respite during exams can thus expect to pay more (and not just because they're buying from Costcutter).

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