The latest official consumer price index figures show that prices for tea and coffee are up 5.7 per cent, and there have been rises in breakfast cereals (2.2 per cent), cakes and biscuits (1.3 per cent) and ice-cream (1.1 per cent), in the three months to December 31.

This is despite the overall price of food and non-alcoholic beverages falling by an average 1.5 per cent in the same period.

Last week, Coles introduced ``super specials'' on a range of green grocery items, slashing prices by up to 50 per cent.

Last year, Coles and Woolworths reduced milk and bread prices.

Consumer watchdog Choice said the discount campaigns may appear to be a boon for consumers but were simply a marketing ploy to get customers through the doors.

Shoppers needed to scrutinise the prices of other basics carefully.

``They are just loss leaders,'' Choice spokeswoman Ingrid Just said.

``Shoppers are naturally attracted to those prices, but once you are in the store you just don't go for that milk, or the cheap bread. You throw other products into your trolley.''

The discount fight has prompted renewed calls for an independent watchdog to curb the power of Coles and Woolworths.

Choice and the Australian Food and Grocery Council said the federal government must appoint a supermarket ombudsman with the power to slap fines on big retailers for anti-competitive behaviour.

The council's chief executive, Kate Carnell, who represents food manufacturers and processors, said lower prices to the consumer would eventually mean lower prices being paid to producers and food manufacturers. Coles was getting bigger and more profitable off the back of price reductions, she said. ``But logic tells you that if Coles is making more money from lower consumer prices, somebody is paying.''

Coles general manager for fresh produce, Greg Davis, rejected claims the campaign was causing lower returns for farmers.

``We are acting responsibly and fairly and our farmer suppliers are pleased with what Coles is doing,'' Mr Davis said.

_ Sun Herald