Tuesday 17 September 2019

Shoppers fleeced by cross-border price gap

Edel Kennedy

'Softly-softly isn't working. It's absolute nonsense that insurance and shipping costs are more here than in the North'

SUPERMARKET giants are charging customers in the South twice what they charge Northern shoppers for the same goods.

A price survey of Tesco and Dunnes by the Irish Independent has found differences of almost 250pc between identical goods.

But the prices charged by the two supermarket giants in the South almost mirror each other, giving customers little reason to 'shop around' as advocated by the National Consumer Agency (NCA).

Last night Tesco and Dunnes refused to comment, with Dunnes saying: "Unfortunately we have no comment to make on this matter." Tesco did not return any calls.

The findings show that despite being less than 32 miles apart, Tesco in Enniskillen charges €1.98 for a jar of cherry peppers compared to €4.87 in Cavan. This represents a difference of almost 250pc. In Dunnes in Cavan, own-brand chicken costs €14.50 per kilo compared to just €9.81 per kilo in the North.

Value

Consumer bodies have hit out at the prices, pointing out that while the euro has gained in value by over 20pc in the last 18 months, the savings have not been passed on to shoppers.

However, Tanaiste and Minster for Trade and Enterprise Mary Coughlan is adamant that there will be no legislative change to force retailers to cut their prices.

A spokeswoman said there is an "ongoing process of engagement" with supermarket giants but said the Groceries Order will not be reintroduced.

"The NCA is carrying out an increased number of surveys which looks at the whole situation," she said.

"Retail Ireland said there has been a reduction in the prices thanks to the movement of sterling and they said there will be more."

However, Michael Kilcoyne of the Consumers Association said the only way the prices are going to change is if the Government changes the Companies Act.

"If we could see the massive profits the supermarkets are making in the Republic, that would show how hugely profitable they are at the expense of the consumer," he said.

He pointed out that Tesco and Dunnes both incorporate their profit figures into their global figures with no indication of the level of profits in the Irish market. "It's time to get tough on them," he said.

"This thing of the softly-softly approach isn't working," he added. "It's absolute nonsense that their insurance and shipping costs are more here than in the North.

"Dunnes says it stocks a lot of Irish products; if their argument is correct then those goods would be cheaper than the discount stores who bring their goods in from Germany."

Difference

He also pointed out that the supermarket giants merely match each other's prices in the South, with very little or no difference in price between goods.

This is evident in the prices offered for a basket of goods in Tesco and Dunnes in the South. A basket of fruit, veg and eggs offer a difference of just 34 cent or 2pc.

Eggs in both stores were the same price at €1.58, while tomatoes were €2.69 a kilo and carrots €1.29 a kilo. The only prices which differed were for lemons, which were cheaper by four cent in Tesco, at 45 cent each, and mushrooms, which were 30 cent cheaper per kilo, at €4.59, in Tesco.

John Shine, director of commercial practices with the NCA, admitted there is little the organisation can do to help consumers get better value.

"There is no price control in the South and that is the fundamental point to get across," he said. "There seems to be price matching in the South rather than price reduction."

When asked what the NCA is doing to try to reduce the glaring price differences, Mr Shine said it has met with the various businesses and asked them for information about their pricing patterns. "Clearly one of the different costs between business in the North and South is VAT," he said.

"But we're not satisfied that the cost of doing business adequately explains the price differences between North and South."

He added that the price differences are also not consistent -- with differences of up to 100pc between identical items North and South of the border recorded.

Mr Shine agreed some consumers -- particularly those who are less well off -- often don't have an option to shop around. Therefore they are forced to shop in their local stores, even if they are more expensive.

Thousands of people living near the border -- and even those in Dublin -- travel North to do their weekly shopping. The fact that many prices in the South are also advertised in sterling has also made more people aware of the price gulf.

However, many British retailers, including Marks & Spencer, Next, River Island, Boots and Laura Ashley, have now blacked out the sterling price.

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