With prices on the rise, consumers need to become more conscious of what products cost, writes Joe Humphreys
A new phrase has been added to the national lexicon in recent times - Rip-off Ireland". The label hangs so well, indeed, that it seems like the natural successor to Celtic Tiger Ireland as a badge of Irish identity.
Whatever about overseas perceptions of a happy-go-lucky people, the Irish are becoming ever more irritated by rising prices, a perceived decline in customer service standards, and a general feeling that shoppers are getting less value for money in a variety of sectors.
Fuelling discontent this week was a survey, conducted by Internet consumer group Retail Intelligence, purporting to show that a basket of 40 groceries in St Tropez, the so-called millionaire's playground on the French Riviera, was 23 per cent cheaper than in a supermarket in Ireland.
Some of the survey's shock value is lost when one realises the outlet in question is Superquinn, Blackrock, Dublin, an area one commentator likened to "St Tropez without the sun".
Significantly, also, the price differential is reduced when alcohol products are removed from the basket. Such products are taxed at a higher rate in the Republic, which may at least partly explain why a can of Guinness costs 60 per cent more here than in the south of France.
Nonetheless, the survey does highlight how Ireland has become a costly place in which to live. Just how costly, and who is responsible for the increase in prices, are points of contention.
The grocers' organisation RGDATA responded to the survey with one of its own, claiming an average basket of grocery items is, conversely, 4.3 per cent cheaper in Ireland than in six other EU states.
RGDATA's director general, Ailish Forde, claimed the Retail Intelligence survey was "simplistic and misleading" as it failed to take into account higher distribution costs and higher taxes in Ireland, among other factors.
Echoing this view, Pat Delaney, director of the Small Firms' Association, says: "You have to look at the recent increase in Ireland's input costs - a 14 per cent increase in energy and electricity, a 9 per cent increase in commercial rates, a 34 per cent increase in rental costs, a 50 per cent increase in insurance, wage increases three times the European average, and inflation twice the EU average. Transport costs and import costs are higher in Ireland, too."
It's a familiar response from businesses. Ask publicans why the price of the pint is so high and they'll speak of rising labour costs and overheads. Ask insurers why premiums are so high and they'll speak of rising claims.
Are such explanations good enough? The Director of Consumer Affairs, Carmel Foley, thinks not. Responding to this week's surveys, she said companies should reveal "exactly who is getting what margin" in the production chain, and she appealed for "whistle-blowers" to come forward to lift the lid of secrecy surrounding the issue.
Speaking yesterday, she said she had received a number of anonymous calls in the past few days from small suppliers who complained of "abuse of dominance" in the sector.
"I am struck by the climate of fear and silence, particularly among small suppliers who feel they will be victimised if they speak out against the bigger entities," she said.
"If the producers of raw materials like potatoes or meat are saying they are getting rock-bottom prices, and the consumer is paying a lot, it's incumbent on the big players and those in the middle of the chain to say where the value is being added. In doing so, they would be repaying our loyalty as customers."
The Consumers' Association of Ireland certainly feels aggrieved by the situation. Its chairman, Michael Kilcoyne, says: "There is no valid reason why potatoes are half the price in Germany as they are in Ireland."
Industry "excuses", such as economies of scale and transport costs, do not stand up to scrutiny, he says. "Labour costs are lower in Ireland than in Germany or France, and transport costs work both ways. I mean, how can you justify Irish beef being cheaper in France than in Ireland. The cows don't swim to France. They have to be transported."
He says the association is investigating alleged "rip-offs" in a host of other areas, including hotels and restaurants. "Some places charge €2 for a glass of milk when a farmer sells a gallon of the stuff for €1.27. Now that's some mark-up."
Ms Foley cites a similar example, soft-drinks, which are not subject to the same taxes as alcohol yet cost several times more in pubs than in supermarkets.
One matter on which all sides agree is that consumers need to become more price-conscious. Mr Delaney notes that a down-side of the current "feel-good factor" in the economy is that people lose track of the price of goods.
"We need to create an environment where people appreciate the relationship between what you earn and what you pay. During the early 1990s, and during the middle of the partnership years, we had that, and as a result we had low inflation." Ms Forde adds: "The more people are aware of prices the better for all of us."
Ms Foley agrees consumers have a role to play but, she says: "I don't think we should put all the responsibility on them." Echoing comments by Mary Harney in the Dáil this week, she says there is a need for increased competition and greater transparency in certain markets.
One initiative on the horizon is the publication of a Forfás investigation into price increases since the introduction of the euro. According to a Forfás spokesman, the report will be sent to the Tánaiste "in the next few days". It is expected to be published before the end of the month.
Ms Harney has chosen to take over the consumer policy brief. That perhaps signals a new determination within the Government to tackle inflation and profiteering.