Are foreign supermarket chains ripping us off?

national | consumer issues | opinion/analysis Monday July 26, 2004 12:26 by john mcdermott - Remove Fianna Fail Partv(new members very welcome) Dublin

Aldi and Lidl are getting a lot of criticism in the press of late...

Are the new german Supermarket chains really ripping us off?

Dear Sir,
Renewed controversy and press articles on supermarket price comparisons which compare German discounters Aldi&Lidl to our home grown options ,is intriguing,and there are questions to be asked and answered.
I have holidayed this year in three countries; Greece,Austria,and France.My first ports of call ( when self-catering) are always the above mentioned stores.
I note that the prices of many foodstuffs sold by these discounters in all of these locations are so low compared to Ireland,as to make one weep!.In some cases the difference is almost 100%.
That said,I have observed that many of the products on sale in each of these countries are also sourced locally,-which appears to me to be their policy-,where possible.
Correspondents rightly point out minimal wage disparities between all countries,as an unlikely explanatory factor.
I would point out however that land and house prices in all these countries is amazingly cheaper, than Ireland,-in rural areas.
Prime locations in Capital Cities of course, have their own higher norms everywhere.
Firms such as Aldi and Lidl,are simply only passing on their operating costs to survive and thrive in a high cost environment.
If they find it impossible to source local Irish produce at keen prices,they must ship in much of their supplies from England and the Continent.This they are currently doing.
I also suspect the majority of indigenous food producers in the meat and dairy industry-most of which are farmer owned-have no wish to antagonize their other Irish clients, in the small market context of Ireland,by supplying these foreign upstarts with cheaper produce.
The irony is that these companies could offer invaluable help in opening up all Europe to our own products.
I believe a form of the now defunct 'Milk Marketing Board' is still alive,if covert,here. Every ho sewife knows how far she must still travel ,to buy a 2 litre carton of discounted milk,-despite the fact that new farmers must pay 'rent' to a licencee to produce and sell milk on a restrictive ,farm lobby,dominated 'artificial' market.
Interestingly,In Spain, about 12 brands of U.H.T.milk suppliers compete vigorously with each other on price,in the larger supermarkets,with price differentials as much as 40 percent.
Yet, I presume Spanish Farmers also 'rent'milk licences(Quotas) as do Irish ones,in the same way as Irish taxi-owners used to rent plate licences- prior to deregulation.!This is what a powerful lobby group can impose on Europe's consumers.It is known as 'C.A.P',for short.
There are now widespread calls here for our government to intervene in the free market and 'cap' retail grocery prices in Ireland.
Asking the government to intervene is ,with respects, like deputizing Bonnie and Clyde to help apprehend a bank robber. !'Set a thief to catch a thief'
Bertie Ahern's government are the prime cause of 'rip-off Ireland ;'with their endless stealth taxes; soaring business rates:wasteful spending of public funds:and inordinate wage increases to highly paid civil servants who have secure jobs and priceless-in the private sector- index linked pensions.
A degree in Economics is not a pre-requisite to understand this fact

Certainly the new boys on the block(Aldi and Lydl) may be doing some price goughing-and who can blame them ,so great is their latitude for maximizing profits here.
Their Irish competitors can be thankful. The harsh reality is, they would all go out of business overnight, if Aldi and Lidl transplanted continental prices here -along with their stores.!
As most checkout operators are now non-nationals this might not be a job loss disaster for our citizens.
Is the 'Common Market' only common to every other country in Europe.?
Ireland's grocery,alcohol,cars prices , etc indicate that it is.
Fianna Fail have the advantage and the privilege of an 'A La Carte' E.E.C.membership card,with respect to what we in Ireland must pay for many consumer goods.
The danger is that Aldi and Lidl will now emulate them and.join -rather than compete with-that cosy club ,called 'rip-off Ireland'.Who would blame them?