Irish consumers are paying retailers an extra €1.3 billion a year, or €1,000 per household, largely as a result of "rip-off" mark-ups, according to Fine Gael's finance spokesman, Mr Richard Bruton.
While acknowledging that higher insurance and staff costs have pushed up prices, Mr Bruton asserted yesterday that most of the increases have gone to increasing retail profits.
Mr Bruton, who based his claims on his own analysis of a Central Statistics Office report on prices, said the average mark-up in shops was 50 per cent on top of the supplier's price in 2001, compared to 44 per cent in 1997. "This mark-up has increased by 6 percentage points in the last four years, most of which went towards profits rather than wages."
He found that the highest mark-ups occur in bars (95 per cent), up 20 percentage points in four years. Hotels marked up prices by 80 per cent and restaurants by 63 per cent.
While in 1997 the cost of goods and services was 3 per cent cheaper than the euro zone average, in 2001 it was 15 per cent dearer and "we have become even more expensive since then", he said. And in a point which will fuel farmer dissatisfaction with the prices they receive for their produce, Mr Bruton's analysis shows that farmers get just 30 per cent of the final retail price for their goods.
"Farmers get 27 cent per litre for milk that sells in the shops for 87 cent," he said. "Farmers get under 2.30 per kilo for beef, the shopper pays over 7.40 for stewing beef."
He maintained that while suppliers had cut the price of food for export by 9 per cent - to deal with competition - they had cut the price of domestic sales by just 1 per cent. Indeed, food prices had increased in shops by 2 per cent despite the fall of 1 per cent in the cost of this food to the stores.
"Suppliers have faced the same pressures over insurance and wage costs as the retailers," said Mr Bruton. Yet the cost of food to shops had fallen by 1 per cent, while the cost to the consumer had risen by 2 per cent.
Mr Bruton demanded new measures to make price increases more transparent, such as a legal obligation on retailers to display last year's price along with this year's.