Branded goods much more expensive than in Northern Ireland market
Smaller price differential between own brand goods
18 June 2008 – The National Consumer Agency has found, as expected, evidence of considerable mark-up on branded goods when compared with prices in Northern Ireland. However, there was a much smaller difference in price between own brand goods North and South of the border.
The findings were revealed in a survey conducted by the NCA of Tesco, Dunnes Stores and Lidl, North and South of the border.
There was a 31% difference between a basket of 42 branded goods in Dunnes Stores North and South of the Border, and a 28% difference between Tesco stores. For own brand goods there was a much smaller price differential:
- 17% difference for Tesco
- 11% difference for Dunnes Stores
- 16% difference for Lidl
These differences were after product prices were adjusted for VAT and excise duties.
The NCA also found greater competition in the Northern Irelandgrocery market than in the Republic of Ireland. The survey found that for a basket of 22 items in common between Tesco and Dunnes Stores North and South of the border, there was a price variation of €2.40. The same basket was identically priced in the Republic of Ireland at €78.53.
Ann Fitzgerald, Chief Executive of the National Consumer Agency, said: “The outcome of the survey throws up a number of issues for business to address. Despite claims by retailers about the higher cost of doing business in the Republic of Ireland, it is interesting that there is a much lower price differential on own brand goods.
"It is accepted that Irish people have a tendency to purchase branded goods and I believe that the retailers are charging us for that preference. Furthermore, there is greater competition in the own brand market due, the Agency believes, at least in part to the presence of Aldi and Lidl.
"As we expected, branded goods are considerably more expensive in the Republic of Ireland. Even taking account of different business models and costs in the two jurisdictions, it doesn’t explain such large differences.
“The other interesting finding that the survey reveals is that there is evidence of competition in the Northern market but identical pricing in the Republic on a basket of 22 branded goods,” she noted.
“We believe that the greater number of players in the Northern Irish market contributes to competition but the concentration of just a few main players in the Republic of Ireland market is leading to price matching.”
Further information
Read detailed findings of the survey, and further information on VAT/Excise adjustments.