Friday, November 6, 2009

Shopping in the North

A business owner I know needs to buy spirits. Not for himself, for his business. He tells me he is thinking of getting them in the North to save money. It's technically illegal, but who is going to know? I try to persuade him to keep his business this side of the border.

Hang on a second, I said, you can get bottles of vodka on promotion now for €18.99 - somebody somewhere always has them on sale at or below cost to try and keep people shopping in the Republic. Surely the savings can't be that much?

So we looked at it, a bottle of Smirnoff in Sainsbury's for £12.50 stg. Today's exchange rate is about 90p which makes it €13.89, call it €14.50 to allow for being ripped off by the bank on the exchange rate. Take the VAT off the €19 and the cost comes down to €15.64. Cost in the travel, food etc and you can add €50 to the trip. That's not costing in the waste of time - is time still money? Not sure any more. Anyway, it suddenly means you have to buy a lot of spirits to make it worth your while. Will they have all you need for a business in Sainsbury's or will you have to drive and queue up to get into a different supermarket?

Is it worth the hassle? Probably not in this instance because he can claim back the VAT on his purchases in the Republic.

However, for a punter who can't claim back the VAT, the price differences are compelling, particularly on booze, including wine. The fact that the wine selection available in the North's supermarkets is poor has little relevance, given that the majority of people don't really care as long as it is alcoholic and cheap.

Without some action on duty and VAT, or without a massive weakening of the euro, I'm afraid the exodus North will continue for some time to come.


Murray said...

I really want to support my local wine shop - and I do, but not with all of my business- however when I see wines like Dr Loosen for just over £6 in Newry versus €12.99 down here it's hard to justify paying the price available locally.

I do hope the government makes it easier for the Irish wine trade to offer keener prices, & I'm aware that as one goes up the price scale the price differences start to close, but I'm afraid I feel better opening an everyday bottle during the week when it costs 6 or 7 euro rather than 12 or 13.

Gabriel Cooney said...

Hard to argue with that