Consumers in UK 'pay 48% more than in US': Levis dearer, but condoms cheaper

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The Independent Online
BRITISH consumers are paying an average of 48 per cent more than Americans for the same products, according to a new survey. The worst example is Levi jeans - they are three times more expensive.

The survey, by the magazine Business Age, confirms concerns raised by bodies such as the Consumers' Association and the Office of Fair Trading, whose director, Sir Bryan Carsberg, has spoken of possible restrictive practices and price cartels which he says are 'harder to track down and deal with under (British) competition law'.

Among the explanations offered by some of the companies, the survey says, are that the cost of property, equipment and labour is higher in the United Kingdom (McDonald's); the British consumer gets better quality goods than in the United States (Hoover); and American manufacturers use the UK as a 'profit-making market' (Dixons).

According to this latter explanation, firms treat the US as a springboard to launch products but make much of their returns in Britain. However, other manufacturers, including Levi-Strauss, blame retailers for price increases.

The survey found that a shopping basket of 24 grocery items was only 15.7 per cent cheaper in the US than Britain, despite publicity about high profit margins among British supermarkets.

The differences were larger over a random selection of 50 consumer goods, however. After Levi jeans, the most expensive products were a Wilson tennis racket (186.5 per cent more in the UK), petrol (173.7 per cent more), disposable contact lenses (158.6 per cent), blank audio cassettes (150 per cent) and computer disks (109.7 per cent).

Video games, compact discs, computers, televisions, dry-cleaning, taxis, cinema seats and photographic development were all more expensive. However, contraception may be cheaper in the UK. Of the five products where prices were lower in the UK, condoms headed the list (50.1 per cent less), followed by a ticket to Cats, the musical (43.4 per cent), electricity (38.7 per cent), a Penguin dictionary (18.5 per cent) and sending a first-class letter (13.8 per cent).

Many of the items cheaper in the US are British-made. A British-made compact disc costs pounds 11.99 in London's Oxford Street, but the equivalent of pounds 7.99 in the British-owned HMV shop in Manhattan - - a difference of 50 per cent.

The survey is claimed to be the most comprehensive analysis of prices in the US and the UK undertaken. Several of the products examined, including video games and compact discs, are the subject of fair trading investigations.

Other explanations of higher UK prices include VAT at 17.5% and other duties, on items like spirits, cigarettes and petrol, and heavy discounting in US markets.

The magazine concludes that the UK market is 'half asleep' and consumers are being treated like 'mugs'.

----------------------------------------------------------------- Ten Selected UK/US Consumer Prices ----------------------------------------------------------------- UK US per cent price difference ----------------------------------------------------------------- Levi 501s pounds 60 pounds 20 200 Wilson tennis racket pounds 149 pounds 52 186.5 Awatch watch pounds 23.50 pounds 12 95.8 Nike Air running shoes pounds 55 pounds 35 57.1 Hoover vacuum cleaner pounds 59 pounds 39 51.3 Ford Escort pounds 9,999 pounds 6,666 50 Filofax pounds 39.99 pounds 26.95 48.4 McDonald's Big Mac pounds 1.81 pounds 1.30 39.2 Book, The Thatcher Years pounds 25 pounds 20 25 Sony Walkman pounds 23 pounds 19 21.1 -----------------------------------------------------------------