Irish food prices second most expensive in EU

HARD-PRESSED Irish shoppers are paying some of the highest prices in Europe at a time when their household budgets have never been more strained.

A Europe-wide survey yesterday revealed Ireland is the second most expensive country in which to buy food and non-alcoholic beverages, the third most expensive for restaurants and hotels and by far the most costly for alcohol and cigarettes.

A food basket here costs 20% more than the average across Europe, restaurants and hotels costs 29% more, and drink and cigarettes 70% more. We’re also 16% more expensive for cars and car parts.

And while clothing and electrical equipment cost 5% and 6% below the European average respectively, our total costs are 18% above the norm, making us the fifth-dearest place after Denmark, Finland, Sweden and Luxembourg.

The findings come as many consumers struggle to meet basic shopping needs and 28% say they have no discretionary spending money as every cent goes on paying their basic bills.

The results of the Eurostat survey also made depressing news for farmers, who said it clearly illustrated the disproportionate control retailers, in particular the large supermarket chains, had over prices.

Irish Farmers’ Association president John Bryan said while food prices were 20% above the European average, the prices farmers received for their food products were at best on a par with, and in many cases, below, other European countries.

“It is clear that neither farmers nor consumers are receiving fair treatment in the food supply chain, with power resting in the hands of a small number of retail multiples. The latest Teagasc National Farm Survey shows that, while farm incomes recovered from the unsustainable lows of 2009, average farm income in 2010 was still only €18,000.”

However, Retail Ireland, the representative body for retail employers, said the survey showed prices were coming down.

Director Torlach Denihan said: “The last time the gap between Ireland and the EU average was this small was 2001. We are getting there but have a way to go yet.”

Eurostat acknowledged that the massive price difference between Ireland the rest of Europe for drink and cigarettes was largely due to high taxes and Mr Denihan warned against any attempt to increase taxes on these products in the budget.

Any increase in taxation of tobacco will aggravate the problem of cigarette smuggling, which currently accounts for 27% of the market and costs the Exchequer an estimated €500 million in lost revenue. An increase in the taxation of alcohol could revive cross-border shopping.”

The most expensive of th 27 EU states is Denmark while the cheapest is Bulgaria, reflecting a trend across the region where the northern countries are the most expensive.