Ireland expensive, report finds

A report published yesterday by ForFas confirms something that most Irish consumers have known for a very long time which is that pretty much everything seem to cost a whole lot more here than elsewhere.

I think many people might have had a hope when the single market became a reality 18 years ago that there would be broadly similar pricing across the EU. So the pair of Camper shoes in Madrid would cost the same as a pair Camper shoe in Dublin. Of course that hasn’t happened at all and those shoes are still nearly half the price in Madrid while wine, food cosmetics, cars and clothes all sell for significantly less everywhere but here.

As part of the study a sample basket of 40 goods was filled. This sample basket cost €89.30 in Ireland and €70.94 in the euro zone - a gap of 25.9 per cent. Even when the effects of differing VAT rates were removed, there was still a gap of 22.3 per cent.

Out of 70 cities, Dublin was found to have the 4th most expensive restaurants, the 5th highest rent. Cars, clothes, food, hotels and taxis were all considerably more expensive than most other countries. We pay nearly 20 per cent more for medicines and are one of the three most expensive countries for furniture. The list goes on and on.

According to this study, the Single European Market has been important for both the growth and the diversification of Irish trade but a real down side has been that the price gap of certain internationally branded products between Ireland and other EU states is still high and very hard to justify.

Now every time I contact retailers and manufacturers to ask why their products cost so much more in the Republic than elsewhere – and that is something I do nearly every week for readers of Pricewatch - I almost always get the same answers. It’s like they have all been given the same statement.

They blame higher overheads such as waste charges and utility bills and they say that wage costs and taxes are higher in Ireland. And this may well be the case But I thought it was interesting that the report debunks at least some of those excuses. It says that while high costs faced by Irish businesses may contribute to higher prices, “the perception of an unexplained gap in prices is reinforced by the fact that Ireland does not rank highest for many business costs.

It says that there appears to be room for the Single Market to deliver more to Irish consumers in areas such as financial services and the motor industry and services generally.

It suggests that one way of redressing the price disparities is to exploit the opportunities associated with online shopping and e-commerce. The study says that e-commerce is not fully utilised, despite increased access to the internet and rapid development in internet shopping. And it has called on the Government and the EU to introduce an action plan to improve consumer confidence in e-commerce as a method of doing business, it said.

47 per cent of consumers here bought online while 42 per cent lack the confidence to buy purchases from other EU countries. The main barriers to shopping online are an unwillingness to reveal credit card details, no web access and an uncertainty as to what to do in things go wrong.

Amongst the five pillars of a proposed EU-wide consumer strategy are enhanced cross border shopping rights which will see an overhaul of current legislation which. the report says is incomplete and out of date. A stronger system of redress in the event of there being a dispute. And greater access to information across all the markets.

The report also calls for a high level investigation into the reasons some traders give for refusing to trade in certain markets with a view to ensuring maximum choice for consumers. And it calls for a formal and ongoing investigation into price differences across the EU for a basket of typical goods and services.