Economics -
Prices 3
But
the most important impact of government on prices
has been through creating or sanctioning barriers
to competition. In virtually every business where
British prices are high, government has allowed
an obstacle. Perhaps the most celebrated barrier
is the Common Agricultural Policy which has cost
British families as much as £1,000 a year in
higher prices and taxes. Such barriers have been
created by - or are supported by - governments
(or the EU). Of course there are specific
businesses that may gain from such barriers and
lobby for them. All businesses love a monopoly.
But governments cannot duck responsibility. If
one is "angry" about high prices in
Britain, one should be angry at governments -
past and present.
British shoppers
pay up to 40% more for branded items such as
clothes and perfumes than consumers in other
countries, according to a government report. The
study, carried out jointly with the Swedish
Government, has prompted Trade and Industry
Secretary Stephen Byres to call for reforms to
stop UK shoppers being ripped off. Under European
Union (EU) trademark laws, manufacturers can
dictate which retailers in the EU can sell their
products and where they can import them from.
Mr Byers said companies were obviously abusing
the legislation to keep prices artificially high
in some countries. The legislation also prevents
British retailers from sourcing goods from
outside the EU on the "grey market"
where they are often cheaper. He is now calling
for an overhaul of the trademark laws.
"Action is needed to reform the EU law on
the protection of branded goods," he said.
"I want the Tesco's and Asda's of this world
to be able to source the best deals from anywhere
in the world and pass those savings on to
consumers."
He said the findings had been circulated to other
European Union member states. The report surveyed
the price of 133 items in France, Germany,
Sweden, the UK and the US last November. It found
that High Street prices in Britain were often the
most expensive.
In particular, music lovers are often paying
significantly more for chart CDs, DVDs and
computer game consoles. The findings will be
discussed at a meeting of European consumer
affairs ministers in Sweden on Thursday and
Friday. Consumer Minister Kim Howells will be
representing the UK. Court cases Mr Howells said:
"We are working with the Swedes to push for
removal of trademark restrictions on the import
of such goods. "We hope other member states
will support our joint approach. More cut-price
designer goods could be sold on supermarket
shelves "We want the European Commission to
change the Trade Mark Directive so traders can
import cheaper branded goods from any country.
"Allowing brands to dictate which retailers
can sell their products and where they can import
them from is unacceptable. "Effectively the
directive forces retailers to import goods from
the most expensive suppliers."
Supermarkets, most notably Tesco, have gone
head-to-head with companies and sourced goods
from outside the EU on the "grey
market". Clothes manufacturer Levi Strauss
has argued this is illegal. But earlier this
month, the European Court of Justice indicated
that traders such as Tesco should have their
interests considered.
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