Irish food basket costs 20% more than EU average

IRELAND’S reputation as a rip-off destination has been reinforced after it was revealed that food, drink, hotel and restaurant prices are among the EU’s highest.

The tourist industry said the figures do not reflect the reality of doing business, or visitors’ experience here.

A Eurostat survey of the 27 EU states revealed a food basket here costs 20% more than the average across Europe, restaurants and hotels costs 29% 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 after Denmark, Finland, Sweden and Luxembourg.

Irish drink and cigarette prices are said to be 70% above average.

Hotel and restaurant prices are the third highest in the EU, at 29% above average. Only Sweden and Denmark are more expensive.

Prices in Britain, our largest tourist market, are 3% above average, while other near neighbours are also a few percentage points above or below the norm.

Fáilte Ireland spokesman Alex Connolly said tourists expressed the view that prices were competitive compared to other destinations and, with VAT on tourism-related services being cut from 13.5% to 9% this Friday, costs should fall further.

Alcohol prices have traditionally been high here but the survey inflates them further by grouping them with tobacco, which is heavily taxed as part of national health policy.

The Restaurants Association of Ireland (RAI) said the survey obscured the very low margins restaurants were operating under due to high wage costs.

“Restaurants will pass on the VAT reduction to customers but that won’t address the main issues affecting the industry,” said RAI chief executive Adrian Cummins. “Many restaurants are not making money because of the wage structure.”

The Irish Hotels Federation (IHF) chief executive Tim Fenn said accommodation prices, which have fallen 30% since 2007, only made up a fraction of the costs surveyed.

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

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.”

Eurostat noted that the price difference between Ireland the rest of Europe for drink and cigarettes was largely due to high taxes.

The most expensive of the 27 EU states is Denmark, while the cheapest is Bulgaria.