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Taking GST off fresh fruit and vegetables a step in right direction

Clocktower from the Leith

Monday 27 September 2010 12:49pm

The Labour Party has announced a change in its health and tax policy to include removing GST from fresh fruit and vegetables.

Professors Tony Blakely of the University of Otago, and Cliona Ni Mhuchu of the University of Auckland, give this proposal cautious support as a move to improve health across the board, and reduce inequalities.

“Earlier this year we published research showing an 11 percent increase in purchasing of fruit and vegetables when 12.5% was taken off the price,” says Ni Mhurchu. This finding was from a large randomised trial of 1,100 New Zealand shoppers, and published in the American Journal of Clinical Nutrition.

This increase equates to about half a kilo more fruits and vegetables per household each week, or about six extra servings.

“There is reason to believe that Māori, Pacific and low-income shoppers might increase their purchasing of fresh fruit and vegetables more in percentage terms in response to a removal of GST,” says Professor Blakely. “This, combined with the fact that low income shoppers spend a bit more in percentage terms on fruit and vegetables, suggests that taking GST off fruit and vegetables is probably also a good way of reducing inequalities.”

“Improving our country’s nutrition is a challenging and complex policy issue, requiring both a responsible and canny state, and changes in personal behaviour,” says Professor Blakely. “In addition, it requires strong leadership from the food industry – most notably, a full transfer of any GST exemption to lower prices.”

“It’s important to find effective ways to encourage people to buy and eat healthier foods” says Dr Ni Mhurchu. “Traditionally there has been reliance on education to promote healthier diets. However pricing strategies to encourage consumption of healthier foods could have more powerful effects”.

Whilst both Professors Ni Mhurchu and Blakely are cautiously supportive, they note other interacting issues that need to be considered:

  • Responsible marketing, product placement and other activities by the food industry
  • Research and monitoring to ensure that cheaper fruit and vegetables do not just lead to increased purchasing of non-healthy foods.

Regarding the latter, the same study that reported an 11 percent increase in fruit and vegetable purchasing in response to a 12.5% price discount found no increase in unhealthy food purchasing – which is reassuring.


Professor Tony Blakely
University of Otago
Tel 64 7 364 8280 (20/9 to 24/9)

Associate Professor Cliona Ni Mhurchu
University of Auckland
Tel 64 9 923 4494

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Background Information for Media

  1. Poor dietary habits are responsible for up to forty percent of deaths New Zealand, or around 11,000 deaths each year
  2. The SHOP study was led by The University of Auckland in collaboration with the University of Otago, Te Hotu Manawa Māori, and the Heart Foundation’s Pacific Islands Heartbeat Unit.
  3. The researchers gratefully acknowledge the collaboration of Pak’ N Save parent company Foodstuffs (Wellington) Co-Operative Society Limited, the individual supermarket stores, and 1,104 shoppers who took part in the study.
  4. Two thirds of all food purchased in New Zealand is from supermarkets and SHOP was unique in testing food purchases in this real-world environment.
  5. The research was conducted in eight Pak’ N Save supermarkets using an electronic scanner system already available to shoppers. Sales data from the scanners were used to measure the effect of the study interventions on food purchases.
  6. Study participants were randomly assigned to one of four intervention groups: price discounts on healthier supermarket foods, nutrition education tailored to their usual supermarket purchases, a combination of both discounts and tailored education, or no intervention (control group).