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Thursday 28 August 2014

Food prices make us fifth dearest EU nation

Aideen Sheehan Consumer Correspondent

Published 23/06/2012 | 05:00

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EATING, drinking and smoking are much more expensive in Ireland than most other places in Europe.

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Tax, labour costs and overly dominant supermarkets have been blamed for making Ireland the fifth most expensive country in the European Union.

Consumer prices here are 17pc higher than average, according to a new study by the EU statistics body Eurostat.

But bargain hunters can actually do well here when it comes to some items -- we are cheaper than most other countries for clothes, shoes, furniture and electronic equipment.

It's a different story when it comes to food and drinks, though -- these are 18pc more expensive than average in the EU, and 15pc more expensive than in our nearest neighbour Britain.

And alcohol and cigarettes are a massive 63pc dearer than average, with high excise duties making them more than twice as expensive as in many Eastern European countries.

High food and drink prices contribute to restaurant and hotel prices here being 26pc above average for the EU. Cars are also 8pc dearer, transport services are 20pc dearer, communications are 18pc more expensive and home energy costs are 4pc above average.

Non-eurozone countries Denmark and Sweden were the dearest in the study of prices in 2011, coming out at 42pc and 28pc more expensive respectively, while Luxembourg and Finland are also dearer than Ireland.

The Irish Farmers' Association (IFA) said the Eurostat figures highlighted the urgent need for a government code of practice to curb supermarket power.

They said this had become even more concentrated in the past 18 months with three retailers -- Tesco, Dunnes and Musgraves -- now controlling 80pc of the grocery market.

"Ireland is the fifth highest priced country in the EU for food and non-alcoholic beverages. In contrast, farm-gate prices are on a par with other European countries," said IFA president John Bryan.

Rubbished

Ibec's retail lobby group blamed taxes, rates and the high cost of doing business. It said food prices were roughly the same as in 2006 and VAT here was the fifth highest in the EU.

"The costs for retailers of doing business in Ireland is much higher than in other EU states -- rents, local authority rates, utility bills and so on are all very high here," said Ibec's Stephen Lynam.

But the Consumers' Association of Ireland (CAI) rubbished these claims. It said that the claims about higher retail costs didn't stand up -- otherwise clothing, furniture and electrical equipment wouldn't be cheaper than average.

"Most food is also exempt from VAT so that argument about VAT isn't relevant. It was lowered to 9pc in the restaurant and hotel sector yet they're still coming out 26pc higher than average," said CAI chairman Michael Kilcoyne.

The latest statistics come just days after Dublin dropped down to 72nd place in a league table of the most expensive cities in the world.

Dublin was 10th in the table during the boom, suggesting prices have come down. However, the Mercer 2012 Cost of Living Survey had different criteria to the Eurostat report -- looking specifically at cities rather than countries as a whole. It also looked at a basket of specific goods or services available to city dwellers -- such as a cup of coffee or an apartment -- rather than broader costs such as food or drink.

Irish Independent

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