It hasn't gone away, you know. Just a few years ago, the country seethed over the phenomenon that came to be known as "rip-off Ireland". Prices were the highest or second-highest in the EU across a variety of areas. Customer service was at an all-time low. The simple act of buying goods or services was booby-trapped with multiple catches and snares for the unwary consumer, writes Paul Cullen
But we got tired of self-flagellation. We got on with our lives. Government assured us that the problems were being dealt with.
And guess what? We're still being ripped off. Prices are still among the highest in the EU. Customer service as delivered by many of our leading companies has morphed into customer disservice. We have more watchdogs than ever, but some are toothless and ineffective. Meanwhile, the Republic scores as badly as ever on basic quality-of-life indicators such as class sizes or hospital waiting lists.
"Not a lot has changed," says Dermot Jewell, chief executive of the Consumers' Association of Ireland (CAI). "Rip-off Ireland is still a reality and prices are extraordinarily high."
The Minister for Enterprise, Trade and Employment, Micheál Martin, while rejecting the term "rip-off Ireland" as too simplistic, admits "there are still rip-offs. Some people, on the back of our affluence, have pushed things too far." Martin worries whether the Republic will get a bad name internationally as a result of unscrupulous practices.
Recent surveys have revealed the extent to which Irish consumers are still being fleeced. This month's Eurostat review of food, drink and tobacco prices in Europe shows that Irish food prices are a full 25 per cent above the European average, while alcoholic drink and tobacco prices are almost twice as dear.
The survey shows that even goods which are readily available locally are far pricier in the Republic than elsewhere in Europe. Bread and cereals, for example, are 21 per cent dearer here, and meat is 29 per cent more expensive. The difference on fish is 23 per cent and on fruit and vegetables 30 per cent.
There may be justifiable social policy reasons for loading the prices of alcohol and tobacco with taxes - the Republic is the dearest country in the EU for both products - but price hikes on ordinary food products can't be explained away on the same grounds.
Eurostat, which describes the price disparities as remarkable, compiled its data last year, so the situation could be even worse now.
Another popular measure of prices internationally also shows how expensive the Republic has become. The Economist magazine's hamburger standard follows the price of one humble but popular product, the Big Mac, across more than 120 countries. While the survey is intended as a lighthearted tool to check the valuation of currencies across the world, it shows how even McDonald's, which is renowned for its love of standardisation, adjusts its prices in certain markets. And so, in Dublin a Big Mac will cost you $4.67 (€3.40), compared with $3.41 (€2.48) in the US and $4.01 (€2.92) in Britain. The average price in the euro area is $4.17 (€3).
Shopping around is of limited value, as the food price survey published earlier this week by the National Consumer Agency (NCA) reveals. Almost half the leading brands surveyed at the three main supermarket chains cost exactly the same in each. The inescapable conclusion is that the multiples are engaging in "me-too" pricing for their bestselling items, prompting questions about how much real competition is taking place. The NCA now plans a more in-depth investigation to ascertain whether there are greater price divergences for non-branded items.
The second trend which emerged from the survey is that prices in convenience stores are consistently higher than in the main supermarkets. No doubt Spar stores have to pay high rents for their urban sites, but are these so high as to justify the mark-up of more than 20 per cent revealed in the survey? The figures in various surveys don't take account of our high living standards in Ireland, producers and retailers point out. Yet the last time Eurostat looked at comparative price levels based on our purchasing power, the Republic still emerged as the second most expensive country in the EU (behind Denmark). Last year, we were 24 per cent more expensive than the EU average, while the UK was only 9 per cent dearer. And while direct taxes are certainly low in Ireland, indirect taxation, such as excise, VAT, and Vehicle Registration Tax, is higher than for many of our neighbours. The overall tax burden has been rising steadily over the past three years.
"The Government says we have good take-home pay and low direct taxes, but the level of indirect taxes is frightening," says Jewell.
Prices aren't just higher here; they're also rising faster. Inflation is currently bobbing around the 5 per cent mark, the second-highest in the EU, and there's little hope of improvement in the near future. Micheál Martin takes comfort from the fact that the main drivers of inflation currently are external - oil and gas prices, and mortgage interest rises - but these affect all Europeans, and a look at the longer-term figures shows up other problems.
This week's Central Statistics Office household budget survey showed that, while disposable income has grown since 2000, the benefit is concentrated in higher-income families, and 70 per cent of us are living beyond our means. The burden of increased gas and electricity charges, accident and emergency charges and "voluntary" contributions to schools falls disproportionately on poor households, who are also the least well equipped to demand their rights as consumers.
As the report of the Consumer Strategy Group (CSG) noted two years ago, one of the principal areas showing inflation since 2000 has been the services sector. Often, the goods and services with the highest rates are those regulated by the Government, such as water supply, refuse collection, the post, and hospital and outpatient services.
So we have largely ourselves to blame, something the CSG report was quick to point out: "Most inflation has been generated at home, and has not been directly sourced from abroad though rising costs for imported goods."
So, while rising prosperity may have encouraged the odd greedy restaurateur or doctor to slap an extra few euro on the bill, even branded products, which are the same everywhere, cost significantly more in the Republic than elsewhere (see panel).
The traditional response from producers and retailers is to blame price gaps on rising wages, high rents and increases in the cost of electricity and waste charges. The additional costs of importing goods to an island economy and the expense involved in moving goods around by road are also cited. But let's not forget that corporation tax is significantly lower here, and our ranking for many business costs is no more than average.
Doing right by consumers isn't just about price. It's also about quality of service, how companies handle complaints, and transparency of the rules of purchase. By any of these indices, Ireland is a hostile environment for consumers, as the drumbeat of complaints heard on radio and internet discussion groups shows. These are busy times for the State's regulators and ombudsmen, most of whom are handling more complaints than ever before.
Complaints to the Financial Services Ombudsman were up 21 per cent in the first part of this year, and that comes on top of a 14 per cent rise last year. RegTel, which monitors the premium-rate telecommunications industry, received more than 13,000 complaints last year, a fourfold rise on the previous year. Over at the Data Protection Commissioner, the number of complaints doubled last year, to more than 650.
But if consumers are getting such a raw deal, then why aren't their concerns reflected more in public debate? After all, consumer issues hardly featured in the recent election campaign and, while there are occasional controversies caused by, say, a cancelled Ryanair flight or a mucky Barbra Streisand concert, these tend to be shortlived.
One reason is the disparity in power between producers and consumers. Just as the Department of Agriculture, Fisheries and Food is dominated by the concerns of farmers rather than those of consumers, the focus of the Department of Enterprise, which has responsibility for consumer affairs, is on industry rather than its customers.
A second reason is the lack of consumer representation in areas where it counts. No consumer organisations are included in social partnership discussions, where so many policy decisions are made, and the CAI's bid for membership has been specifically rejected.
This powerlessness isn't accidental. Employers are often hostile to consumer interests, but they're not the only ones. Even trade unionists are suspicious, with talk of consumer rights sometimes seen as a Trojan horse used by right-wingers to push producer interests.
While the Irish Congress of Trade Unions (Ictu) general secretary, David Begg, insists he is "agnostic" about CAI joining the partnership process, he goes on to say he doesn't know who the association represents. All consumers are also producers, he says, "so if you force down the price of a hamburger, that could put hamburger workers out of a job".
In Begg's eyes, consumerism is a "neo-liberal concept", while calls for greater competition form part of "a real, consistent campaign of advocacy for neo--liberalism". He dismisses the Competition Authority as "zealots in mindless pursuit of competition".
Economists, meanwhile, see inflation and high prices as the inevitable result of economic prosperity. Economic consultant Jim Power says the Republic's higher inflation rate is "a textbook economic response to an over-heated economic situation".
"The blanket description of Ireland as a location where 'rip-off' occurs is dangerous, misleading and damaging to the best interests of the Irish economy," Power wrote in a recent report. "In many cases, the increase in the cost of living has occurred for solid fundamental reasons and not because the vendors of various goods and services are engaging in undesirable practices which could be broadly be termed 'rip-off'."
Such analysis regularly cites rising costs and government levies as the driver of higher prices, but it seldom looks at corporate profits to see whether the companies involved are genuinely feeling the squeeze.
Meanwhile, even key regulators such as ComReg and the Financial Regulator don't have consumer representation, except on corralled consumer panels which have no statutory powers.
Compared to Britain or The Netherlands, the consumer lobby here is small, weak and cash-strapped. The CAI is run on a shoe-string, relying mainly on subscription fees from its monthly magazine to pay the bills. It doesn't have the resources to undertake the kind of detailed research needed to counteract the powerful spin of producer interests.
Other efforts to highlight problems are also floundering. Fine Gael's ripoff.ie website hasn't been updated in months. Websites that monitor petrol prices haven't managed to provide up-to-date information. Shoppingbill.com has been for sale for more than a year. Ripoffireland.org is "under construction". The Ireland Offline group recently folded its tent.
The good news is that things may be about to change. Consumers are becoming more demanding and less accepting. The internet provides new routes to find value and compare retail offerings. Irish law has been strengthened through the incorporation of EU regulations and more consumer legislation is on the way. Consumer issues are finally getting more attention in the media and from the legal profession. The EU has appointed a commissioner with specific responsibility for the area.
Finally, the National Consumer Agency is gearing up to become a muscular advocate for consumers, with a wide palette of powers and sanctions as its disposal.
Change is demanded of individual consumers, too. "We live in an expensive country," says Ann Fitzgerald, acting chief executive of the NCA. "If buyers are willing to pay high sums, then sellers will charge that. We've got to become less passive in our behaviour."
"Mary Harney got into some trouble for saying people should shop around, but she was right," says Micheál Martin. "It comes down to consumers voting with their feet."
Branded: the dearest country
The Republic emerges as by far the dearest place to shop for branded items in a six-country survey carried out this week by The Irish Times. Irish shoppers pay over 50 per cent more than their counterparts in Germany for a basket of common brands, it emerges from the survey.
We checked the prices of 20 leading brands in Dublin, London, Edinburgh, Amsterdam, Brussels and Munich last week. The same basket of goods was sampled in the Consumer Strategy Report in 1995, so some indication of food inflation could also be obtained.
The survey found large price disparities between the Republic and the other states for some goods, while prices for other staples were broadly similar across the board.
The Republic is the most expensive country for 11 of the 20 items included in the survey, and cheapest for none. The disparities in price are astonishing: for nine of the products, Irish prices are about twice those in the cheapest country.
To take a few examples: four Gillette Mach-3 blades cost €10.99 in a Dublin supermarket but just €6.84 in London; a packet of Pampers newborn nappies costs 9.39 here, but only €4.79 in The Netherlands.
We shouldn't be surprised, perhaps, that Ireland is dearest for Evian mineral water - €1.79 in Dublin against 0.83 in The Netherlands - but we're also the most expensive country for shampoo (Pantene Pro-V costs €4.99 here and just 2.29 in London).
You can buy a tub of Philadelphia cheese for 0.91 in Munich, but you'll pay €1.93 here. And finally, a bottle of Bacardi white rum costs a whopping 21.68 in Dublin and only 11.39 in Germany.
The only good news is that prices haven't changed too much since this basket of goods was surveyed for the Consumer Strategy Report two years ago. While 16 items have increased in price, two have fallen and two are unchanged.
Germany emerges as the cheapest country in the survey, with the lowest prices for 10 of the 20 items and the highest for one item. The Netherlands is cheapest for six of the items and highest for two.
The total cost of the basket (minus one item which could not be sourced in Germany) is 81.78 in the Republic and 51.94 in Germany, a margin of 57 per cent.
The supermarkets chosen in London, Edinburgh and Munich were all in city-centre locations.
Food prices are only one aspect of the cost of living, of course, but according to Pat Cox, an Irish IT manager living in Munich for the past 20 years, the cost of living in Germany is lower across the board.
Cox and his German wife, Ute, paid about €500,000 for a three-bed semi on the outskirts of the city in 2003. He estimates his energy bills at about 700 a year for electricity and €1,300 for gas, while broadband costs 60 a month and he also pays 150 a year in rates. Waste charges are only 160 a year, but there is also a 200-a-year water charge.
Health insurance costs about 100 a month and a visit to the doctor just 10. Munich's fabulous public transport systems takes him into town for 2, while petrol costs about 1.30 per litre, somewhat more than in Ireland. Car tax is just €100 a year.
Series continues on Monday in main paper