The National Consumer Authority (NCA) has been asked to carry out a study of the Irish retail sector to find out why goods and services cost more in the Republic, Minister for Enterprise Mary Coughlan told the Fianna Fáil ardfheis today.
Ms Coughlan told the party gathering she had written to the authority last week and asked it to compile the report which will examine how the retail sector operates.
“This study will examine how that sector operates, how competition works and whether any practice or method of competition affects the supply and distribution of goods within that sector,” Ms Coughlan told delegates.
The issue of North-South price differences has been the subject of concern after many consumers began flocking to the North for bargains following a decline in the value of sterling.
Retailers have previously been urged to do more to reduce their prices after a number of studies revealed that higher operating costs in Dublin alone do not explain the price disparity with shops in the north.
That study, which was commissioned by Forfás on behalf of the Tánaiste, looked into the comparative cost of operating retail businesses in Ireland, Northern Ireland, Britain and the Netherlands.
It was commissioned following a survey by the NCA in June 2008 which found that found selected branded grocery goods were up to 30 per cent more expensive in the Republic than the North.
Forfás’s study showed that while operating costs for retailers in Dublin were on average 25 per cent higher than in Belfast, such costs accounted for only 20 to 25 per cent of the total cost of a retail good, meaning that the price differential between goods should only be 5 to 6 per cent higher in the capital.
The report also revealed that the cost base in Cork, Limerick and Galway is more competitive with locations in the UK than Dublin, which had the highest operating costs than in all of the other locations surveyed except London.
Speaking today, Ms Coughlan said that while pressure had been put on retailers in recent months, she believed that retailers still needed to do more to bring down prices of goods and services in the Republic.
"I remain unhappy about the situation and believe that all links in the retail chain are not playing their full part in ensuring that there is the greatest possible degree of transparency as to the reasons for the current North South price differentials.
"This is particularly concerning, given the possible impact on the national economy in terms of loss of employment, loss of trade, loss of revenue to the exchequer and loss of value to the consumer," the Minister told delegates at the ardfheis.
"For some retailers, particularly those along the Border, it is clear that they are under significant pressure because of the euro-sterling exchange rate. It is also true that to survive the current cycle many, in particular small independent retailers, are providing some of the best value available in the State.
"Those that are clearly providing value need to be supported and consumers need to remember that every euro spent at home contributes to protecting jobs and the local economy," she added.
Ms Coughlan said that she intended to continue to pursue the issue until such time as Irish consumers get a "fair deal".
