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Euro switch benefiting profiteers: consumer group

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Businesses and service providers are using the euro changeover to disguise a range of increases, according to the chairman of the Consumers’ Association of Ireland, Michael Kilcoyne, who claims prices have “rocketed,” particularly in the service sector.

Kilcoyne said an ongoing CAI is showing that prices have increased on a range of goods since the Jan. 1 introduction of the new currency.

The claims have been rejected by the taoiseach, Bertie Ahern, and Consumer Affairs Minister Tom Kitt.

Kilcoyne said no businesses have admitted to the CAI that they have raised their prices are a result of the changeover, but that prices are clearly rising.

“I am raising the question of why prices are now more expensive,” Kilcoyne said. “We suspect people are using the currency conversion to mask price increases. That is not acceptable.”

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As a result of what Kilcoyne says is a “barrage” of complaints from consumers and CAI’s own price monitoring, the groups believes “that businesses and services have used the opportunity of the changeover to increase their prices.”

Kitt acknowledges that there may have been some price increases, but that it has happened in an open economy and has little, if anything, to do with the introduction of the euro. He said he is not convinced that there has been a “big euro price ripoff.”

Kitt said official figures show no increases in the most fundamental part of household bill, grocery prices, in the run-up to the currency change.

The CAI had unsuccessfully sought a temporary freeze order from the government on prices for two months either side of the changeover date to ensure there is no profiteering.

The minister said a price-freeze order would only “store up” increases and that an economy-wide attempt to hold prices rises down would be unworkable. When it was tried before on limited scale it had not been successful, he noted.

Kilcoyne said the CAI are finding some prices have gone up by as much as 10 or 15 percent despite the fact that inflation was only 4 percent.

“We are finding increases by pubs, shops, doctors, restaurants, laundrettes, car washes and so on,” he said. “They are denying the higher prices are related to the euro but say they result from rising costs.”

He said only two changes were admitted as being connected with the euro — an increase for toll bridge charges in Dublin and a decrease in the city’s bus fares from the rounding down in the conversion rate ordered by the government.

Kilcoyne claims the consumer price index for January, to be published next month, will reveal a jump in inflation as a result of higher charges and costs because of the euro.

He said one of the health boards has increased the price of a hospital stay by 15 percent since Jan. 1.

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