Shoppers pay more in south due to taxes and costs

SHOPPERS are being forced to pay more in the south because of a lack of competition, high taxes and business operating costs.

A report from the Competition Authority (CA) said the Government must reduce the cost of doing business in Ireland, which is 25% higher than in the North, to help Irish suppliers to survive.

The CA notes that grocery prices have dropped 2% between January and May but it said the large numbers of consumers travelling to the North exposed the “fundamental problems of the Irish retail sector”.

It said removing restrictions on competition in the retail sector would help drive prices down.

Differences in planning regulations between the North and the south have had an impact on prices, according to the report.

It said the Retail Planning Guidelines make it more difficult for low-cost retailers such as Asda to establish a significant presence in the Republic to be able to compete with Tesco, Dunnes, Superquinn and Supervalu.

CA chairman Bill Prasifka said: “Falling retail prices are proof that competition works. Retailers and their suppliers are responding to consumers’ changing shopping patterns. Reducing the cost of doing business in Ireland is key to helping suppliers of retail goods to be competitive.”

The CA’s report follows a request by the Tánaiste and Enterprise Minister Mary Coughlan to examine practices within the retail sector. The report looks at the food, clothing and pharmaceutical sectors.

Ms Coughlan said the publication of the study was part of her “ongoing commitment to bring greater transparency to structure and pricing in the retail sector”.

She also said that she was bringing the study to the attention of the European Commission and the Oireachtas Joint Committee on Enterprise, Trade and Employment with the hope it will help them in their retail sector examinations.

Retail Ireland said it is “essential” the government takes action to address Ireland’s cost base so that it becomes less expensive to run a retail business.

The report also looks at the sharp fall in sterling against the euro, which it says has led to expectations that imports from Britain should be cheaper.

It said even though certain goods are imported from Britain, they are very often not produced there, and may be paid for in other currencies.

The report said the depreciation of sterling has exposed “the more fundamental problems of certain retail sectors and the cost of doing business in Ireland”.

Fine Gael enterprise spokesman Leo Varadkar said although some prices have come down, rip-off Ireland is alive and well.

“Unfortunately, the exodus of shoppers to Northern Ireland will continue as long as the Tánaiste fails to address Ireland’s astronomical cost base and refuses to set up a consumer watchdog with real teeth,” he said.