Consumers ripped off, says CAI

NEW figures on the cost of basic goods and services have provided further evidence that consumers are being ripped off, according to the Consumers Association of Ireland.

Although overall consumer prices in July fell by 0.4% on the previous month, the cost of the vast majority of items listed in the Consumer Price Index have risen sharply over the past year.

CAI chairperson Michael Kilcoyne said many of the price increases had resulted from “pure greed,” particularly in the hotel and restaurant sector.

Only the cost of clothing and footwear has fallen significantly over the past year, with a 6.6% reduction in prices due largely to the traditional summer sales.

The average grocery bill has risen by 2% so far in 2002, driven by individual price increases for bread (+5.2%), meat (+0.3%), fish (+3.7%), fruit (+1.4%) and vegetables (+4.5%).

Alcohol and tobacco prices have also shown noticeable increases, with the average price of beer rising by 3.5% and wine and cider by 5.2%.

The cost of cigarettes increased by 3.3% since last December.

The cost of many individual non-food items and services have also risen dramatically since the start of the year, including hospital charges (+11.5%), petrol (+10%), restaurants (+5.5%), nightclubs (+7.6%), sea transport (+46.3%), newspapers (+4.95%) and accommodation (+5.9%). Mr Kilcoyne accused the Government of being responsible for adding to rising costs by increasing hospital outpatient charges and student registration fees.

“The Government’s concern about inflation rings very hollow when they are responsible for some of the biggest price increases over the past year,” Mr Kilcoyne said.

He warned that spiralling consumer costs would lead to major job losses and a serious downturn in the economy, unless there were changes to current Government policies.

Mr Kilcoyne claimed many hotel and restaurant owners were profiteering at the expense of consumers, as average consumer costs in the sector had risen by over 7% in the past year.

“These figures confirm other studies which show Ireland to be the second most expensive country in the eurozone.

“People shouldn’t be surprised if tourists decide not to come here when they see the prices being charged in hotels and restaurants.

“They are being driven by pure greed, as there is no evidence of wage inflation within the sector,” Mr Kilcoyne said.

However, the Restaurants Association of Ireland said many restaurant owners were forced to pass on increases in the cost of insurance and waste disposal to their customers.

“Restaurant owners are already operating on narrow margins.

“They simply cannot afford to absorb their own increases or offer discounts,” said RAI chief executive, Henry O’Neill. “One restaurant owner in Galway was quoted 46,000 for his annual insurance last March.

“His premium for the previous year was just 7,000,” he said.

A spokesperson for the Irish Tourist Industry Confederation admitted the sector was concerned that rising prices would affect Ireland’s competitiveness in attracting overseas visitors.

IBEC’s Food and Drinks Federation welcomed the introduction of the euro, as it facilitated easier price comparisons between Ireland and other EU member States.

FDF spokesperson Ciaran Fitzgerald said the latest CPI figures showed food inflation in Ireland was in the lower range within eurozone countries.

“The low level of price changes recorded since the introduction of the euro in January reinforces the point that the food and grocery sector in Ireland managed the changeover fairly and properly,” Mr Fitzgerald said.

Austin Hughes, chief economist with Irish Intercontinental Bank, said the improvement in Irish inflation last month was entirely due to a larger than usual reduction in the cost of clothing and footwear.

Mr Hughes predicted inflation was likely to increase later this year due to expected increases in VHI rates, student fees, ESB costs and hospital charges.