28 February 2008

Irish Food Prices are rising too fast

A survey of Ireland's top supermarkets has revealed little price difference between Dunnes Stores and Tesco. The National Consumer Agency commissioned the survey to measure the impact of the Groceries Act. They found that in a basket of 61 goods purchased at Dunnes Stores and Tesco there was only a 35 cents price difference between both.

However the survey found that Super Valu is providing real competition to Dunnes Stores and Tesco. The survey also indicates that the most competitive pricing in the retail sector exists between discount stores Aldi and Lidl.

What the agency does not mention in the report is the fact that the prices for food and other groceries in Ireland have risen massively during the past year and keep rising still. I am sure you have noticed that yourself if you do the regular shopping for your household.
I don't want to make long lists of prices here, even though I could. But that would be boring. Let me just give you a few examples of the constant and galloping inflation the current government presides over. Last year a normal pound of Irish butter was € 1.42 in most supermarkets. In the Autumn of 2007 this price rose in one step to € 1.76 (an increase of 24%), and a few weeks ago it rose again to now € 1.89 (which is another 7.5% extra). So in less than a year the price for an ordinary pound of butter - something most of use every day - has actually risen by more than a third!

Strangely enough, I have heard no one complaining yet. People moan about the high petrol prices, yes, but they are - unfortunately - set mainly elsewhere (even though the government puts a hefty portion of tax on it as well). Butter is a homemade product. And even though almost everything gets dearer all the time, nothing does justify a price rise of 33% on such a basic consumer product.
And butter is - as I said - only one very prominent example in a long line. Literally everything is getting more and more expensive, without any added value to the goods and products. And the worst sector is indeed food, the one thing we all need to survive.

While the shops and supermarkets are bad enough, it gets worse when one makes the mistake to eat out. An evening meal that used to cost me around € 20 some time ago is now priced at € 35, which is a rise of 75% in less than two years. Last week I met a friend in a local bistro for a chat. We shared a pot of tea for two, had a bowl of the "soup of the day" with a slice of brown bread, and my friend also had a slice of apple tart as dessert. How much do you think this very simple meal is worth? And how much should it cost? Well, I paid € 24.85 for that and really felt ripped-off in a very bad way. Not so long ago you would have paid with a tenner for that, and received some change back. I will certainly not go back to that bistro, but unfortunately these days the prices are very similar in all of the places one can go to.

So why is all this happening to us? It is not a result of a world crisis, nor anything the EU is forcing upon us - God forbid! No, this is an entirely home-made inflation problem, proudly sporting the "Guaranteed Irish" label. It is born out of the marriage between traditional Irish greed and the recent economic boom that befell us, commonly referred to as the "Celtic Tiger".
Having been poor, neglected and ignored backwoods people on the furthest outlet of Europe, we grabbed with both hands every single Euro we could get hold of. Many have made good and are now basking in wealth and sunshine (somewhere further south, where they bought a second home). But the "Celtic Tiger" has by-passed whole areas of the country, and a significant portion of the population has never been touched by luck, nor have they touched the magic pot of gold the tiger brought along.

These are mainly the old and sick, unemployed, disabled and otherwise deprived people. They live almost on a different planet now and would be shocked if they ever set foot into Dublin 4. But they are also the hardest hit by the enormous inflation, and especially the totally unreasonable increase in prices for food and basic commodities, such as electricity, coal, peat brickets and public transport (as only a small percentage of the poor have free travel passes). It might come as a surprise or even a shock to some of you, but there are meanwhile - once again - people in Ireland who can barely afford the basic items of living. In one of the now richest countries on Earth they struggle to survive, especially due to the prices for food, which are clearly out of control in Ireland. (In comparison, almost everywhere in Western Europe food costs are about half of what they are in Ireland, and in Eastern Europe even lower than that.)

The National Consumer Agency's survey results from small independent butchers and from fruit and vegetable retailers indicate significant price differentials, but no such price difference is found in larger supermarket chains (as they watch each other like hawks, if they don't even rig prices at times). The Agency says that consumers can drive competition by shopping around, and I wholeheartedly agree. It is the only way ordinary people can move things. If something is too expensive or not worth the price asked for, just don't buy it. You might find it cheaper elsewhere, and over time prices will and do come down when shops realise that the level charged is too high and turnover is down. It is all very simple, the basic rule of supply and demand, combined with the willingness to pay a certain price or not.

Ireland has already become a rip-off society, which also hampers tourism, which is still an important source ot income on the island. If we - the consumers - don't make a stand every day we go shopping, it will get worse and worse, to the point that we could well fall back into a real economic crisis. I am sure that no one wants this to happen.

The Emerald Islander


Tor Hershman said...

Prices stated shooting upwards here, West Virgina, about six months ago.
Is Jimmy Carter back in office?

Stay on groovin safari,

Alexander "Sunny" Bergen said...

Food prices are rising everywhere now and there are two main reasons for it:
1) the rising population of the planet leads to higher demands, and especially the growing wealth in China and India creates a higher demand for food - in particular of better quality and including more meat - in these two countries (with the highest and second-highest population in the world).
2) The increased use of agricultural products - previously used for food - as bio-fuel leads to a further shortage of food and subsequently to higher prices. If the USA keep pushing the bio-fuel issue further, severe food shortage in many countries, especially in the "third world", will be the result.


Thank you for looking in, Tor. Sorry to hear that even in the "land of the free" the prices for food are rising.

But as Alexander points out, this is most likely a global development and is orchestrated by governments (the Bush administration being one of the main culprits here) and big business.

So it can only be stopped and broken by grassroot action and the power of us, the consumers. I buy very selective these days, and am no longer willing to pay more than I deem the article worth. If every consumer would behave in this way, we would see prices coming tumbling down again.

Anonymous said...

so how much is the dairy farmer charging? kj

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