Price wars ensure UK shoppers are not ripped off - survey

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The Independent Online

High street prices wars have ensured British shoppers are not being ripped off compared with their European and US counterparts, according to a report published today by the Government.

High street prices wars have ensured British shoppers are not being ripped off compared with their European and US counterparts, according to a report published today by the Government.

The international prices survey found that UK consumers paid more than shoppers in the US, France and Germany for eight out of 56 items that were analysed.

A Sega Dreamcast game, the top 10 CDs, a two-litre bottle of Coca-Cola, a tin of dog food, lager, shampoo, ground coffee and toilet tissue were all more expensive in the UK than elsewhere.

Play station games, Duracell batteries, the top 10 paperback books, the top five videos and DVDs also cost more in the UK than in the US.

While yoghurt, soap and Lindt chocolate were cheaper in France and Germany than in Britain.

UK consumers, however paid less for Kelloggs cornflakes, a packet of choc chip cookies and a long-sleeved man's shirt.

Pampers nappies, wrapped white-sliced bread and cleaning liquid were cheaper in the UK than the US, while carrots and washing-up liquid cost less in Britain than in France and Germany.

Secretary of State for Trade and Industry Stephen Byers said: "The last year has seen the spotlight turned on prices being charged in shops.

"Pressure from consumers, the media and Government led to prices falling, for example, shoppers have benefited from £500 million of savings from high street price wars.

"These reductions are reflected in today's survey which shows that when goods are compared like for like in the majority of cases, the UK consumer is not paying more than in other countries.

"There are exceptions to this. We will now be analysing the results in detail to consider the reasons for the higher price and whether we need to take further action in these cases."

He continued: "I felt it was very important to give a comprehensive price comparison between the UK, France, Germany and the US.

"We were breaking new ground in trying to have a survey which was robust in that it did genuinely compare like with like, and it has been a very big operation to get comparisons that were robust, between products that were exactly the same."

The survey, by AC Nielsen market research, analysed prices in two cities in each of the four countries, and compared products in various retail outlets.

Mr Byers added: "In the majority of cases, prices across the UK are not significantly different.

"For some people it may be surprising that there is not a significant difference, but it is worth bearing in mind that from March 1999 to the end of last year we saw £500 million worth of reductions in the high street.

"This was partly because of the media spotlight on prices and the fact that consumers reacted to that.

"We are now far more assertive in terms of the products that we are prepared to buy and the price that we are prepared to pay."

He continued to say that the consumers determination not be to ripped off must extend into the wider business world. "One of the reasons why we in the UK do not grow world class companies is that people are able to manipulate the market. This is a lesson we must learn from America. They go out and bust cartels, they do not allow the market to be manipulated. We must do the same."

Asked if he thought consumers were being ripped off, the Minister said: "I think if you wash your hair and settle down in front of a video or to listen to a CD with a two-litre bottle of Coca Cola or a lager, having just fed the dog, about to go to the toilet and finishing off with a cup of coffee, then you probably are.

"On the other hand if you settle down to a bowl of cornflakes and a choc chip cookie wearing a long-sleeved man's shirt then you're probably doing alright."

He added: "But seriously it does show a mixed picture, and it is a serious point that there are some areas where people are paying over the odds.

"I do have the power to refer prices to the Director General of Fair Trading for further investigation and I will use this power if necessary."

Reacting to the results of the survey Tesco marketing director Tim Mason said: "This survey recognises we are a force for price cutting.

"Tesco customers get the best value and prices in Europe. We are continuing to push prices down. In the last three years food prices have dropped by 8% and we won't stop there."

Asda too welcomed the findings and announced that it was reducing the price of top of the charts CDs to £9.99.

A spokesman said: "The music market, thanks to the Internet and retailers themselves, is going global, making it increasingly difficult for record labels and stores to explain to customers why they pay more in the UK.

"It's certainly time for UK shoppers to get the kind of deals on offer to music lovers in the States - and lower prices will revitalise record sales and provide good news for shoppers and Britain's music industry."

The British Retail Consortium welcomed the Government's announcement that it would study the reasons behind price differentials.

Acting director general Mark Bradshaw said: "We have always urged that the debate on pricing examine the barriers to price convergence.

"Hopefully the price debate will now move onto the real issues behind price and leave behind claims of 'rip off Britain'.

"We are sure that further examination of any price differentials will highlight that levels of service and costs faced by retailers vary significantly between countries and these differences mean prices for retailed goods will differ."

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