Crossing the knowing-doing divide

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ShelfLife publisher John McDonald asks why Joe Duffy's Liveline isn't highlighting the shift in sterling value that makes a trip up north 13% more expensive

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8 July 2009 | 0

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Republic of Ireland consumers continue to shop in the north but are they really getting the bargains that they were back at the end of last year?

The euro peaked at a shade under 98 pence sterling on 31 January last, around the time when the trend of ‘going north’ was just beginning to take a real hold.

In May, chief executive of Musgrave, Chris Martin was quoted in a Sunday paper as saying that “20% of people now shop north of the border." The real loss to the economy in terms of jobs, taxes and duties caused by this phenomenon may never be known.

At the recent CSNA ball, Minister Mary Hanafin said that Northern Ireland is a double whammy for the Republic, as the favourable exchange rate and the reduced VAT allowed Irish shoppers to buy their groceries for up to 40% less. Andrew Meagher, chief executive of John Player, explained how smuggled tobacco, bearing his brands, was being sold door to door in Dublin housing estates. The laws penalise the retailers who pay taxes and uphold the regulations while smugglers, who will sell to people of any age, will cost the Republic of Ireland €400 million in stolen taxes next year.

Today, a euro will buy you less than 85 pence sterling. That means that if prices have remained the same in Northern Ireland the real cost to the euro shopper has increased by 13%. I haven’t heard Joe Duffy’s Liveline programme shout about that.

The symbol group retailers in the Republic have crossed the ‘knowing-doing’ divide. They have cut their costs, taken great pain, and gone to huge lengths to ensure that the consumer is getting real value for money. Tesco has crossed the knowing-doing divide. It has built its market share during the boom and is now cutting costs, Irish head office jobs and Irish suppliers.

What we need now is for the Government to cross the knowing-doing divide. Why can’t they use the National Consumer Agency to educate consumers about the damage they are doing to their economy by spending outside of the State? Why can’t they direct more public servants to root out the tobacco smugglers and bring the revenue back to our coffers?

 

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