Smokers and drinkers pay higher price than anywhere else in EU
HAVING a smoke and a drink is dearer in Ireland than anywhere in Europe.
New figures also show that food and soft drinks are 20pc more expensive here than in the other 26 European Union states.
High taxes and excise duties are the main reason Ireland had the highest prices for alcohol and tobacco products in the EU last year.
When a range of goods and services were looked at, Ireland emerged as one of the most expensive countries.
Prices overall were 18pc higher here than the average, according to figures from Eurostat, the statistics office of the EU. But costs in Ireland were below the EU average in two areas: clothing was 5pc cheaper and consumer electronics 6pc less expensive.
Transport meanwhile was 16pc more costly in this country than the average for the EU, with restaurants and hotels almost a third more expensive.
The findings are sure to fuel claims by some consumers that they are being "ripped off" by businesses and the Government.
Retail Ireland, whose members have 3,000 shops, blamed high labour costs, service charges and rents which are among the highest in Europe.
Director of the lobby group Torlach Denihan admitted that prices here are high compared with other EU states but insisted that prices have been falling.
"According to the Eurostat survey, Irish prices for food and non-alcoholic beverages have fallen by more than anywhere else in the EU," he said.
"The last time the gap between Ireland and the EU average was this small was 2001. We are getting there but have a way to go yet."
The fall in Irish grocery prices shows how retailers have responded aggressively to the new economic climate, Mr Denihan said.
"Government must take decisive action to get the Irish cost base back into line with the rest of Europe by measures such as the abolition of the retail joint labour committee and early legislation to reduce retail rents."
Prices for alcohol and tobacco are higher in Ireland due mainly to taxes. This meant there should be no hike in taxes on these items in the Budget, Mr Denihan said.
"Any increase in taxation of tobacco will aggravate the problem of cigarette smuggling, which currently costs the Exchequer an estimated €500m in lost revenue," he added.
There may be some reduction in prices from Friday when valued added tax (VAT) drops from 13.5pc to 9pc on a range of goods and services, as part of the Government's jobs initiative. The lower rate will apply to hotels, restaurants, hairdressing, printed matter, amusement services such as fairgrounds and admissions to cinemas and theatres.
Meanwhile, consumer confidence about personal finances and the economy fell in June.
The consumer sentiment index, compiled by KBC Bank and the ESRI, fell to 56.3 from 59.4 in May.
The underlying trend -- which averages out the last three months' figures -- also fell for the first time this year.
KBC Bank economist Austin Hughes said the drop was not surprising, as consumers still faced a weak economic outlook and pressures on household spending from coming Budget measures and ECB interest rate increases.