THE EUROPEAN Commission has said it will not intervene to stop international retailers charging more for goods in Ireland than elsewhere.
EU competition commissioner Neelie Kroes declined to get involved in the controversy over the mark-up on goods sold in Ireland, saying it was up to Irish consumers to shop around to ensure healthy competition.
Ms Kroes said forcing retailers to sell goods in Ireland at the same price as they do in other member states would be “the opposite of the free market”.
She made her comments in a letter to Fianna Fáil MEP Eoin Ryan, who has asked her to investigate retailers which fail to pass on price reductions arising from changes to exchange rates.
Tánaiste and Minister for Enterprise Mary Coughlan has hinted she could introduce price controls if retailers continue to charge mark-ups on goods sold in Ireland, but most observers think this highly unlikely.
With the refusal of the EU to engage, it is not clear what action can to taken to stem the price differential and the resulting flow of shoppers across the Border.
Last month, a survey by the National Consumer Agency (NCA)revealed that UK retailers were marking up non-food goods by an average of 51 per cent in their Irish outlets. Another NCA survey published last year showed a margin of over 30 per cent in the price of branded food items on either side of the Border.
Mr Ryan, a member of the economics committee of the European Parliament, said the issue was very important for Irish consumers, particularly during the current difficult economic times, because of their exposure to currency changes on goods imported from the sterling area.
In her reply, Ms Kroes said she sympathised with the problems facing Irish consumers, and acknowledged it was frustrating to find the exact same product being sold in a similar store elsewhere at a lower price.
However, the same frustration, in particular when it leads consumers to go to other shops, exerted the strongest “disciplining factor” on retailers, she claimed.
“In my opinion, the best way to ensure attractive prices in Ireland is thus a combination of healthy competition and vigilant consumers.”
In relation to price differences between Ireland and the UK, she suggested there were several potential causes, including higher operating costs for Irish retailers and their practice of importing products indirectly from the UK rather than directly from the source country.
Ms Kroes said: “Forcing a local shop to sell at specific prices against their own volition is in some sense the opposite of the free market.”