Wednesday 16 October 2019

Cost of basket of food here is 20pc higher than average across the EU

Consumer prices for food are 120pc of the EU average, which means it costs a fifth more here for a basket of food in shops compared with prices across the 28 countries in the union. Stock photo: PA
Consumer prices for food are 120pc of the EU average, which means it costs a fifth more here for a basket of food in shops compared with prices across the 28 countries in the union. Stock photo: PA
Charlie Weston

Charlie Weston

Food prices in this country are among the highest in the European Union, despite Ireland being an agricultural nation.

Prices of food and non-­alcoholic beverages are 20pc higher than the average in the EU, according to Eurostat.

This makes this country the fourth most expensive for food and soft drinks, despite our massive agricultural output.

Prices for alcohol and tobacco are the second-­highest in the EU.

Consumer prices for food are 120pc of the EU average, which means it costs a fifth more here for a basket of food in shops compared with prices across the 28 countries in the union.

Bread and cereal prices are 19pc above the EU average.

Meat is 5pc dearer than the typical price across the economic bloc.

But milk, cheese and eggs are 21pc more expensive in this country.

When it comes to alcohol and cigarettes, Irish people pay way more than their counterparts in the EU.

Alcohol prices are 77pc more expensive than the average, reflecting heavy tax. And tobacco prices are double the average.

Policy adviser with the Consumers Association lobby group Dermott Jewell said it was not surprising that alcohol and tobacco prices were so high given the high levels of excise duties imposed on them.

He said German discounters Aldi and Lidl had introduced more price competition for groceries when they entered this market but retailers still regarded this country as "treasure island".

This was because of the high profits they can make here.

"UK retailers have referred to this country as treasure island, and there is a still treasure to be dug up for retailers."

He said Aldi and Lidl had prompted their rivals to lower their prices but costs were still too high.

"Irish consumers are conditioned to pay more but we need more competition in prices," Mr Jewell said.

"We should not be happy to pay more."

The high cost was despite food and drinks exports from this country reaching €12.1bn last year, according to Bord Bia.

There are some 138,000 farms in the State.

Denmark had the highest price level for food and non-alcoholic beverages in the EU last year, followed by Luxembourg and Austria, and then Ireland. At the opposite end of the scale, the lowest price levels were observed in Romania, Poland and Bulgaria.

Food prices in the UK were 6pc below the EU average, with Germany just 2pc above the average.

Economist with KBC Bank Austin Hughes said it was surprising that food prices were lower in both Germany and Britain given the role of supermarket chains from those countries in this country.

He said this reflected a trade-off in this market between the interests of farmer producers and consumers.

Higher transport costs of getting imports and finished goods to this island also explained the high cost of living in this country, Mr Hughes said.

A spokesperson for the Irish Farmers' Association denied they were the reason for high food prices here, and said that farm gate prices across the EU showed very little variation.

The difference between here and other countries lies further up the chain, the IFA spokesperson said.

"The issue is what lies in the middle. Part of it is due to Government taxes, but retailers also guard their margins very carefully," he added.

Irish Independent

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