Catherine Noone (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Minister for attending to address this matter and to hear my concerns. I wish to ask the Minister for Jobs, Enterprise and Innovation whether plans are in place to provide stronger legislation to prevent multinational retailers inflating their Irish prices in comparison to their UK prices. It is my belief that the price discrepancies are fundamentally unfair and poor corporate practice. In both the short and long term, they are damaging to our economy, as each euro that is taken out of circulation in terms of disposable income is, in effect, a euro that will not be spent elsewhere. That is in addition to the obvious difficulties created for retailers who are losing out on business to the UK in circumstances where the same product can be bought at a much lesser price there even with the cost of transporting it. There is a knock-on effect for jobs in this country.

I am in favour of open markets and competition and yet with such consistent price increases across so many retailers in this country relative to the UK, increases which cannot simply be discounted by a disparity in labour costs or freight costs, I cannot help but wonder whether competition is working as fully and effectively as it should. I have written to the Consumer Association of Ireland and to the various retailers who were originally highlighted by a journalist who did some good work for The Sunday Business Post approximately two weeks ago on the issue. As yet, I have received no reply. There is no compulsion on them to reply to me. This is a serious problem which is worthy of the Minister?s time and attention. I would be grateful to hear whether there are plans to deal with the problem.

Seán Sherlock (Cork East, Labour)
Link to this: Individually | In context | Oireachtas source

I thank the Senator for raising this matter. The question posed by her as to whether there are any plans to introduce legislation to tackle higher prices charged by traders in this jurisdiction as compared with prices charged in the neighbouring UK jurisdiction seems to presume that price control measures can protect consumers from what may be perceived as high or unjustified prices. In so far as the general issue of tackling high prices is concerned, price control measures are not an effective means of reducing prices. During the 1970s and 1980s price control was used as one of the primary tools for combating increasing consumer prices and inflation. Various analyses of that period have shown that price control was an ineffective way of tackling high prices, as in many instances maximum prices prescribed for goods very quickly became minimum prices with the result that inflation during that period rose close to 20%. In addition to failing to tackle high prices, price control also effectively acted as a disincentive to businesses becoming more efficient and further prevented justified price rises arising from legitimate cost increases incurred by business. It was for that reason that the Consumer Protection Act 2007 essentially repealed the legislation which allowed for price control and there are no plans to revisit the matter.

As regards differentials in prices for goods in this jurisdiction when compared with prices in the neighbouring UK jurisdiction, there can be legitimate reasons for prices to differ, such as exchange rate movements, different distributional costs, etc. Notwithstanding this, I do not doubt there may be instances where the level of the differential in prices charged for the same goods in the two jurisdictions cannot be justified by reasons such as exchange rate movements. In such instances, it is important that consumers use their discretion. I read the article to which the Senator refers and it is interesting to note a comment made by Mr. Mark Gould of MG Consulting who states:

Everyone is on the web, you can see what a retailer is charging in Britain versus the Republic, so why everyone hasn't responded to that transparency I don't really understand. Retailers that get caught on this only have themselves to blame.

In contrast to the price control era of the 1970s and the 1980s, Government policy in the area of prices has been focused on the promotion of competition and consumer awareness, given that freely functioning competitive markets are more effective at setting fair prices. In so far as promoting greater consumer awareness of prices is concerned, the Consumer Protection Act 2007 specifically mandates the National Consumer Agency to promote public awareness and conduct public information campaigns on issues such as prices. The agency has been very active in raising awareness of prices in a number of different areas. Evidence available to it shows that consumers are becoming more price conscious and changing their shopping habits to achieve better value for their money. It is the case, therefore, that competition and price awareness among consumers are more effective tools to tackle high prices than the price control policies of the past.

As regards general price trends, the consumer price index published by the Central Statistics Office shows that prices in Ireland rose by 1.2% in the 12 months to January 2013, whereas the corresponding index in the UK, the retail prices index, shows that prices there increased by 3.3% in the same period. At the European level, the harmonised index of consumer prices, which is the accepted measure for comparing price trends across the European Union, shows that prices in Ireland increased by 1.7% in 2012 as compared with an increase of 2.3% across the Union and 2.7% in the United Kingdom in the same period.

I am firmly of the view that consumers, by exercising the power they command, are better placed to ensure they get a fair deal than any legislative intervention that would seek to regulate the prices traders charge for goods and services. Accordingly, by informing themselves as to the different offerings in the marketplace and being strategic in their shopping decisions, consumers can help to ensure they achieve the best value for their money, which is all the more important in the current economic climate.

Catherine Noone (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Minister of State for his reply. Many of the points he makes are well considered. I am perhaps showing my age when I assure him that price comparisons between the UK and Ireland in the 1970s and 1980s were not on my radar at the time. I will contact the National Consumer Agency to ask that it increase its efforts to improve public awareness of price differentials. If it has the funding to do so, it should conduct public information campaigns on the issue. I agree with the Minister of State that the Government cannot be expected to cater for every circumstances that arises. If the view he expressed on price fixing is accurate, I would not encourage this approach. I thank him for his full response.

Seán Sherlock (Cork East, Labour)
Link to this: Individually | In context | Oireachtas source

I note the article in The Sunday Business Post of 24 February states that a shift dress on sale in the Monsoon chain is priced at £129 in Britain, which converts to just under ¤150, whereas the Irish price is ¤199. The word "shift" in Cork parlance has completely different connotations. Perhaps the Senator will enlighten me on the matter afterwards.

Terry Leyden (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Perhaps the Minister of State and Senator Noone can meet later for a chat.

Catherine Noone (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I assure the Minister of State it is not a reference to the kind of shift he has in mind.