New Zealand's largest chicken supplier is raising prices amid "ongoing cost pressures on the industry". 

Tegel announced this afternoon the "roughly 10 per cent" price hike would begin from this month. 

It comes as annual food price inflation grew 6.8 per cent in the 12 months to May 2022 as the country grapples with a cost of living crisis. 

In a press release, Tegel chief executive Egbert Segers said rising costs in labour, transport, fuel and logistics had hurt many businesses, including his own. 

"We've also seen across-the-board increases in insurance and utilities and this, coupled with employee shortages, has meant that there are no costs going down." 

Tegel is a major supplier of chicken products in New Zealand. Photo / Supplied 

He also said the war in Ukraine had compounded existing issues relating to grain demand and prices that had reached a 20-year high. 

"The war has now put added pressure on the availability and supply of grains and oil seed products which are key components in chicken feed around the world." 

Segers claimed the costs were so substantial, the 10 per cent price rise wouldn't cover cost pressures on chicken producers. 

"However, we understand our role as the market leader in chicken in New Zealand so Tegel is working with retailers to ensure affordable options remain available to all customers." 

Last month, Statistics NZ revealed annual food price inflation grew 6.8 per cent in the 12 months to May 2022. 

Tegel's price hike won't cover the ongoing cost pressures, according to its chief executive. Photo / Alex Burton 

Food prices increased across the board, led by fruit and vegetables, which increased 10 per cent annually. 

Higher dairy prices were also a major contributor. 

"Average prices for grocery food items like yoghurt, milk, and cheese were all notably higher than they were in May 2021," consumer prices manager Katrina Dewbery said. 

"Yoghurt has seen the largest increase, with the weighted average price of a six-pack of yoghurt increasing from $5.60 to $6.40." 

For the 12-month period, grocery food prices increased 7.4 per cent, restaurant meals and ready-to-eat food prices increased 6 per cent, meat, poultry, and fish prices increased 7 per cent and non-alcoholic beverage prices increased 2.7 per cent. 

The annual rate of food price inflation was higher than the 6.4 per cent rise in April 2022 compared with April 2021.