Blog
A European Supermarket?
31st January 2008
The European Union Single Market commissioner has announced plans for a more systematic survey of price differences for similar goods and services across the 27 nations of the internal market. This BBC audio-visual clip from Mark Mardell is an excellent introduction to a teaching lesson on the causes of price divergence within the EU single market. Why is a litre of milk so much more expensive in the UK compared to Belgium. Why is a Nintendo Wii or a top of the range Nokia mobile phone significantly more expensive here than it is in many western European markets?
The EU believes that price convergence will be helped by giving consumers more information and that this transparency of prices might help to curb price discrmination by businesses that supply more than one country in the group of twenty seven nations.
According to a draft report: ‘There are wide discrepancies in prices of retail goods even across neighboring or comparable countries.” A litre of milk costs the most in Cyprus - where the average price of milk, cheese and eggs topped an EU price comparison for 2006 - and the least in Latvia and Lithuania. The Irish paid the highest prices in the EU for alcohol and British the most for tobacco - partly a result of higher indirect taxes on products that are harmful to health.
An article in the Telegraph yesterday produced a useful small table showing a range of price differences - this could be a good starting point for discussion in the classroom
Source: Daily Telegraph
More reading here
Mark Mardell’s Euro Blog
Brussels to name and shame rip-off companies (Daily Telegraph)
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.