Sick of being ripped off? Stay out the car, the bank and the chemist

HAVE you ever tried to change your bank account from one bank to another? Or have you ever tried to change solicitors? Do you know how much you pay for a gallon of petrol?

Or what the mark-up is on a packet of paracetamol over the counter in a chemist’s shop?

Let me put all those questions another way. When are we going to see some real competition at work in Ireland? We’ve had endless talk about it, indeed some political parties claim they’re the only people interested in promoting competition. As it happens, those political parties are in government, and have been for the last eight years.

In that time they’ve done more or less nothing to promote any real competition in the economy.

If you don’t believe me, try this the next time you’re out for a Sunday drive. Look at the price of unleaded petrol at all the garages you pass. (Maybe you’re one of those intelligent consumers who does this all the time. I’m not, at least I didn’t until recently, and it has been quite an eye opener).

In my neighbourhood there are eight garages. I’ve been in the habit of using one of them principally because it has an ATM on the forecourt.

It wasn’t until last week, when my wife asked me why I insisted on using the most expensive one, that I began to look at the prices. She was right. It was the most expensive, by 2 cent a litre (that, by the way, is 10 cent a gallon, or about €1.50 every time I fill up).

But what struck me as odd was that when I actually drove around and looked at the prices in all eight, six were exactly the same. The garage closest to me, and the only one that still has a helpful petrol pump attendant, was cheaper than the six by 3 cent a litre, and cheaper than the one I regularly use by 5 cent.

On that basis, switching from the most expensive forecourt to the cheapest in the locality now saves about €3.50 for a fill of petrol.

But how do you account for the fact that six of the eight have identical prices? This isn’t unique to my neighbourhood. I drove past six garages in a row in Cork last weekend, and five of them were identically priced - all, incidentally, 3 cent cheaper than the average in Dublin.

What’s going on here? Is somebody really going to try to persuade us that this is the sort of result that real competition produces? We had huge controversy last year about the break-up of Aer Rianta, with the then Transport Minister Seamus Brennan arguing that it was the only way to bring competition into that market.

I’m still trying to figure out who is supposed to be competing with whom. Is Cork supposed to be competing with Dublin for passengers? Is Shannon supposed to be competing with Cork for freight? But while this nonsense was going on, nobody in government has bothered their backsides about doing anything real about the way consumers and citizens are really ripped off. Let’s take the business of trying to change your bank account. I was tempted to do that recently - not because I have any complaint against my bank (in case my bank manager reads this, I want you all to know that he’s a saint, a gentleman, and scholar!), but because I was being cajoled by another bank.

But when I stopped to think about it, I realised I’d have to take a week off work to do it. Between the standing orders and the direct debits, and the fact that my wages are paid into one bank, means there are about ten things that can go wrong in the process, any one of which could leave any of us seriously embarrassed. It simply can’t be done, unless your bank is willing to be helpful.

There is simply no compulsion on them to help in any way, and up to now they have all tended to treat their customers as prisoners. I notice that the Irish Bankers Federation have produced a code of practice, which is due to come into effect from the end of this month, to make it easier for customers to switch and thus enable them to shop around for the best deal.

That’s welcome, of course, but it’s an entirely voluntary code. I’d be very interested in hearing from any reader who sees big signs up in their local bank, come February, advising customers that this new service is available. The signs ought to say: “In the interests of competition, we’re encouraging you to shop around for the best value and service, and we’ll help you to switch to another bank if you can do better.”

But don’t hold your breath while you’re looking for those signs.

IN some ways, of course, these are relatively small examples of the competition issue. It’s when one comes to examine the professions that one realises how much we are at the mercy of their uncompetitive practices.

Let’s just concentrate on one, though it would be just as easy to write about a half-dozen of them.

I didn’t know until I watched Prime Time the other night just how difficult it is to break into the pharmacy business. It transpires that it’s almost impossible for a newly-trained pharmacist, especially one not trained in Ireland, to set up in competition to an existing shop. I’m sure you remember, just a couple of years ago, when the Government talked about deregulating the business after publication of an OECD report encouraging greater competition. Every time you walked into your local chemist’s shop you were asked to sign a petition to protect the “family pharmacy”.

But somehow or other, the idea of deregulation just faded away, and the pharmacists were able to relax once more into their goldmine.

And what a goldmine it is. I’m sure you’ve never been in a chemist’s shop that isn’t madly busy, and where you don’t have to wait for counter service. But apart from all the money transactions conducted over the counter, you ought to see the money they get from the state.

The General Medical Services Payments Board has agreements with pharmacists to supply drugs on prescription, under a number of different schemes. All told, according to their most recent annual report, they paid out over €800 million to the pharmacies with whom they have agreements.

Each pharmacist is paid a standard fee per item of just under €3, and they processed more than 12 million prescriptions in the year (many of those prescriptions have more than one item in them, and the pharmacist is paid a fee per item, not a fee per prescription).

And how many pharmacists are at the receiving end of this enormous amount of money (and don’t forget it’s only part of what they earn)? In the whole of Ireland, it’s 1,292. No wonder they fight so hard against competition. And no wonder that it’s just one more area of life where a small minority do fantastically well, and the rest of us get stuffed.