Economic News Analysis
Karen Chan (1)
Cynthia Cheung (7)
F.4A
NEWS
South China Morning Post
Friday April 16 2010
Cheese prices rocket, but it's not all bad news
Amy Nip
Cheese topped the list of price increases among 200 top-selling items last year,
soaring 25 per cent, the Consumer Council found. This was more than eight times
the average 3 per cent increase of the items sold by supermarket chains ParknShop,
Wellcome and Vanguard.
The survey divided the products into 12 categories. The prices of all but two
increased, but the average overall was much lower than in 2008, when prices rose
13 per cent.
By category, the prices of milk powder and baby products showed the biggest
increase. The dairy and yogurt category, which includes cheese, followed, at 7.6 per
cent.
Consumer Council chief executive Connie Lau Yin-hing said the soaring price of
cheese could be attributed partly to an appreciation in the currency of Australia, a
key source of imports.
Among subcategories, nuts, milk powder and packaged rice had some of the biggest
increases, with 10.5 per cent, 10.3 and 9.2 respectively.
'Many people from the mainland buy milk powder in Hong Kong, and their demand
could have lifted prices,' Lau said.
The vice-chairman of the council's publicity and community relations committee,
Ron Hui Shu-yuen, said the higher Australian dollar also made rice from that
country more expensive.
But for those who like wine with their cheese, some relief came from a plunge in the
price of red and white wines of 9.7 per cent, the biggest drop in all the
subcategories.
Meanwhile, a study by the council warns people to beware of luncheon meat. Seven
out of 10 samples of canned luncheon meat were high in sodium - containing more
than 0.6 gram per 100 grams of food.
The saltiest one, Ma Ling pork luncheon meat, contains 2.2 grams of sodium in three
slices of meat. The amount exceeds the World Health Organisation's recommended
limit on the daily intake of sodium.
'If you eat it with instant noodles, then you would have way too much sodium,' Hui
said.
An earlier study by the council found one instant noodle pack contained as much as
four grams of salt, double the WHO's daily limit.
Too much salt in one's diet increases the chance of hypertension and heart disease,
Hui said.
Two canned sardine samples, Golden Dragon brand XO sardines and Red Marubean
Japanese sardines in tomato sauce, also had high salt contents. Eating a can of Red
Marubean sardines in oil would account for half the daily limit for fat as
recommended by the WHO.
Over the limit
The worst offenders* (per 100 grams)
Ma Ling Pork Luncheon Meat: 2.2g of sodium
Hormel Foods SPAM Classic: 29g of fat
Red Marubean Brand Japanese Sardinesin Tomato Sauce: 0.6g of salt
* WHO recommends daily limit of two grams of sodium and 60 grams of fat
Supermarket items with the greatest price changes
Cheese: +24.7%
Nuts: +10.5%
Milk powder: +10.3%
Rice: +9.2%
Potato chips: +8.2%
Biscuits: +7.9%
Bread: +6.6%
Noodles: +6.2%
Cooking oil: -4.8%
Wine: -9.7%
SOURCE: CONSUMER COUNCIL
Source to support answer
超巿物價去年升 3% 芝士果仁奶粉加最多
(明 報 )2010 年 4 月 16 日 星 期 五 05:10
【明報專訊】消委會
08 年 調 查 顯 示 ， 本 港 超 市 貨 品 瘋 狂 加 價 12.8%。 該 會 今 年
發 現，09 年 本 港 超 市 持 續 加 價，平 均 加 價 3%，比 同 期 綜 合 消 費 物 價 指 數 0.5%的 加
幅 更 高 。 眾 多 用 品 中 ， 芝 士 的 加 幅 最 高 ， 一 年 來 加 價 達 24.7%， 其 次 為 加 價 約 10%
的 果 仁 和 奶 粉 ， 食 米 亦 加 價 9.2%。
僅酒類即冲飲品跌價
消委會調查了惠康
、百佳
、 華 潤 萬 家 三 大 本 地 超 市 約 200 項 貨 品 ， 共 分 為 12
大類，結果除了酒類飲品和即冲飲品售價下跌外，所有貨品售價都錄得升幅，酒類
飲 品 平 均 售 價 跌 幅 較 大 ， 達 7%， 估 計 是 本 港 減 酒 稅 所 致 。
百佳發言人回應表示，因匯率、通脹、氣候等因素令貨品價格上升，如澳元和紐西
蘭
元在去年上升兩、三成，因調查涉及的芝士由澳紐入口，因此錄得價格升幅，
而果仁失收，令價格上升。華潤萬家發言人表示，澳洲
米入口價亦受匯價影響，
加上內地奶粉發生問題，增加自由行旅行來港搶購奶粉，供不應求下奶粉加價。
消委會主席劉燕卿表示，本港是自由經濟體，難以規管超市加價，但希望超市能提
供準確的價格資訊，同時不要有「先抬價再減價」的假減價情况出現。
Description
According to the news, the Consumer Council found that Cheese topped the list of
price increases among 200 top-selling items by supermarket chains ParknShop,
Wellcome and Vanguard. This is because of the appreciation in the currency of
Australia. Nuts have increased 10.5%, which is among the second. For milk powder,
it’s the third, which has increased 10.3%. This is because the mainlanders came to
Hong Kong to buy the milk powders. However, the red and white wines have the
biggest drop among the list. Furthermore, 7 out of 10 samples of canned luncheon
meat have found to be harmful to our health due to a high content in sodium. The
amount of sodium exceeds the World Health Organization’s recommended limit on
daily intake of sodium, which may increase the change of hypertension and heart
disease.
The supermarkets are oligopoly
The news is about the products sold by the 3 dominant supermarkets in Hong Kong.
They are ParknShop, Wellcome and Vanguard, which are called oligopolists. The
goods sold by them are heterogeneous, such as cheese, wines and luncheon meat. As
the goods sold are heterogeneous or homogenous, the buyers and sellers have
imperfect information such as the price, quantity and quality of goods sold as they can
change the price without losing customers. Consumer council stated that the 7 out of
10 samples of canned luncheon meats sold by these supermarkets have high sodium,
this shows that the oligopolists (the supermarkets) have imperfect information about
the luncheon meats’ quality.
Rise in demand for the milk powder leads to increase in price
According to the news from
P
South China Morning Post, it
shows that the demand for milk
powder for babies has increased
10.3% because mainlanders
came to Hong Kong to buy the
milk powders. The milk powders
in Mainland were found to be
harmful to babies’ health, hence,
the demand for the milk powders
in Mainland decreases. Milk
powders in Hong Kong are
substitutes of the Mainland’s
S
P2
P1
D1
0
Q1
Q2
Hong Kong’s milk powder
D2
Q
milk powders. This leads to an increase in demand for Hong Kong’s milk powder.
Therefore, the suppliers have to raise the price in order to eliminate excess demand.
All in all, this increases the equilibrium price and equilibrium quantity of milk powder
in Hong Kong.
Decrease in price of wine due to the reduction of tax
As mentioned from the news,
P
the prices of red and white
wines fall for 9.7%. This is
because of the reduction of
P1
wine tax in Hong Kong. Unit
CB
sales tax is imposed when
P2
same amount of tax is imposed
PB
on each unit of the good
regardless of its price.
Reduction of per unit tax on
wine will lead to an increase in
supply of wine. Hence,
equilibrium price falls and
equilibrium quantity rises.
S1
S2
T
LOSS
D
0
Q1
Q
Q2
Red and white Wines
Increase in price of nuts due to the bad harvest
According to the news, the
P
price of nuts has increased
greatly for 10.5%. This is
because there was a bad
P2
harvest on nuts farm, thus the
supply of nuts decreases.
P1
Hence the equilibrium price
rises with a decrease in
S2
S1
equilibrium quantity.
D
0
Q2
Q1
Nuts
Q
Increase in price of cheese due to the rise in exchange rate
According to Consumer
P
S2
Council chief executive,
Connie Lau Yin-hing, the
increase in the price of
P2
cheese is because of an
appreciation in the currency
P1
of Australia. When the
exchange rate of Australia
increases, this will increase
the import price of Cheese
imported from Australia and
eventually increase the
production cost. Thus, the
0
Q2
S1
D
Q
Q1
Cheese
supply of the cheese
imported from Australia decrease and leads to rise in price and fall in quantity. As
Australia is the main source of imports in the Hong Kong’s cheese market, hence, the
increase in price of Australian cheese has a big impact on the entire cheese market in
Hong Kong. Thus, equilibrium price increases and the equilibrium quantity decrease
due to the fall in supply.
Prediction of fall in demand for luncheon meat
According to the news, the
P
Consumer Council warns people to
beware of luncheon meat, 7 out of
10 samples of canned luncheon meat
were high in sodium, which is
unhealthy to people, as the amount
P1
of sodium exceeds the World Health
Organization’s recommended limit
P2
on daily intake of sodium. This may
increase the chance of hypertension
and heart disease. We can predict
that the demand for canned
luncheon meat will decrease and
thus the equilibrium price and the
equilibrium quantity of canned
luncheon meat will fall.
S
D2
0
Q2
Q1
Canned luncheon meat
D1
Q