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Boo hoo – we’re being bullied by Tesco

I’m getting tired of the frequent coverage given to Tesco and how they’re operating, allegedly, in the Irish grocery market. I don’t care really that it’s mostly negative – they’re too big, they’re too powerful, they’re bulling customers, they’re bullying suppliers.

There’s a very very simple solution to all of this.

Don’t shop in Tesco.

If they’ve no customers, they’ve no power, they won’t be too big, and they won’t be able to bully customers and suppliers.

If we (and I mean Irish people here – or maybe just Irish journalists) have a problem with Tesco, stop shopping there. Things would soon change.

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The National Consumer Agency Price Comparison Website – RIP – and just as well

It’s some time ago that the NCA admitted that they had to give up on trying to build a grocery price comparison website in order to replace their fairly pointless half years shopping exercise around the country.

In a very weak moment, I did express support in this exercise from an organisation that I have mostly very little faith in, and unfortunately, I guess I should have know that my faith was misplaced.

I’m quite keen on the potential that there exists in Ireland for a grocery price comparison website – I’ve even gone as far as developing what I suppose is effectively a “business requirements document” for what could be achieved with such a site given current web 2.0 type available functions and application.

However, as was indicated by the NCA when they announced their ending of their efforts, any grocery price comparison website needs to get the full co-operation of all of the grocery players in Ireland – a level of co-operation that effectively means them handing over a computer data file of all of their prices countrywide every morning.

There’s no point in having a price comparison website if the prices aren’t as bang up to date as possible.

I had thought that the NCA may have been in a better position to get this co-operation than me so I sent them my ideas in case anything could be made of them.

And very kindly, the NCA did give me a couple of hours towards the end of last year to discuss my thinking on the kind of site and functionality required.

We had some relatively indepth conversations regarding how price information could be gathered and classified – particularly to classify products to allow comparison between branded and non-branded items (e.g. 1l of branded milk compared to 1l of non-branded milk).

In my own professional line of work, I work with applications where daily pricing updates are received every day from multiple external data sources where products are categorised to up to 5 or 6 levels to allow cross-comparisons.

Those that I spoke to were particularly interested in that line of conversation. At the end, while promising to keep in touch and keep me updated on their work, they – at the time – gave me a very positive update on where they were in their own efforts.

Three weeks later, they cancelled the project.

I’m writing about this now because I came across a presentation given by the Chief Executive of the NCA, Ms. Ann Fitzgerald, to something called the Eurostat Conference back in October 2009. At this conference, Ms. Fitzgerald gave some inkling as to how the NCA’s thinking was actually progressing with regards to their price comparison website efforts:

The Agency is currently engaged with retailers in an initiative designed to increase the level and frequency of the information provided to consumers.

The Agency is working to develop a system of frequent surveys, covering each of the main retail groups, which will track the prices of commonly purchased basic food and household products.

This would be delivered through each retail group providing us with the prices that they charge for a pre-agreed list of goods at regular intervals. The prices would be compiled and placed on the Agency’s website so that consumers could compare prices and make informed shopping choices on an ongoing basis. In addition, in order to facilitate consumers who may not have Internet access, versions for newspaper and other media outlets would be made available, so that they could also benefit from the information.

If “frequent surveys” was the way they were intending on developing a price comparison website, then it’s probably just as well they didn’t proceed.

“Frequent surveys” would have been about as useful as their 6 monthly surveys – the data would be out of date almost as soon as it was collected, never mind when the information is eventually published.

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Understanding “the angles” when reading the newspaper

Recently, I’m becoming more and more aware of “the angles” or agendas of newspaper journalists when reading their published articles. Some would say that I’m just becoming more cynical. While some angles and agendas are not always obvious, you would have to sometimes wonder where a journalist is coming from when they’re writing a story.

So, as an example, when a journalist wants to address the issue of mobile phone charges being very high in Ireland – say 3 or 4 years ago at the height of Rip Off Ireland, they won’t accept the networks reasoning that it’s because Irish people talk more. As far as they’re concerned, it’s because we’re being charged more. It’s good to knock the networks after all.

ARPU – Average Revenue Per User

One thing to remember here is that the measure of how much a consumer is charged, as calculated by the mobile companies, is ARPU – average revenue per user. This ARPU value is made up of two factors – the actual charges for services levied by the networks, and the amount of those services availed of by the consumer. So, a high charge with low usage, or a medium charge with medium usage, or a low charge with high usage could all provide the same ARPU calculation.

But back to angles and agendas!

Say in 2006, the ARPU for Irish mobile users is said to be high compared to Europe – this is can only be because Irish mobile users are being charged more for their services – not that they’re using the services more. Dan White of Independent Newspapers wrote about this way back then – The €300m mobile rip-off.

But say that in 2010, the ARPU value for Irish consumers has fallen by 8% and from €49 in 2005 per month to €37.40 now *, then this can only be because the “Irish cutting back on the auld chat” according to the very same Dan White of Independent Newspapers.

In 2006, Mr. White had this to say:

The massive margins being earned by Vodafone and O2 in this country are costing Irish mobile phone users about €300m a year.

Further proof that Irish mobile phone users pay over the odds is provided by the fact that the average European ARPU is just €30.26 a month (€363.12 a year), compared to an Irish average of €47.37.

Whereas in 2010, when the Irish ARPU has fallen to a level that is still above what the European ARPU was back in 2005 (not commented upon strangely), there is no chance that the increased market competion amongst the Irish mobile market participants is given any credit for this drop. If you’ve knocked the networks before, you can’t obviosuly give them any credit now.

In 2005, we had Vodafone and O2, with a little bit of Meteor pre-paid, in the Irish mobile market. We now have a much stronger Meteor, along with 3 Mobile, and Tesco Mobile, all providing strong competion to Vodafone and O2.

But this isn’t even entertained by Mr. White – he strangely now accepts the logic rejected back in 2006 that the usage costs of Irish mobile users is dependent on how much we use, and by extension, nothing to do with the level of charges applied by the mobile companies. He’s now on the side of the argument he dismissed back in 2006 and now uses it to justify a position he cannot back up in 2010:

Having long been the most prolific mobile phone users in Europe, it seems the recession is teaching the Irish to cut back on the gab.

And as we all know, competition can and frequently does bring down prices. So, Irish consumers could actually be getting the same mobile services from their providers as they were in 2005, but are just paying less for them.

As just one example, I’m paying less on a monthly basis now that I was 2 or 3 years ago, but I’m getting vastly more for my less money now than I was for my more money back then. My ARPU for O2 would be down, but I’m not using their services less.

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What would it take for you to switch your bank?

There’s a lot of talk these days about how our choice in banking is slowly but surely being eroded with the closure of Halifax, Postbank, NIB branches, First Active and the looming threat that both AIB and Bank of Ireland will engage in massive branch closures to save cash.

On that basis, this post may not be all that timely – but I guess after years of recording incidences of where banks repeatedly gouge their customers through multiple overcharging scandals, this post may never be timely in Ireland.

Is there anything that would make you change your bank account – assuming that knowing that your bank is quite likely to steal your money from your account for themselves won’t do it for you.

This article from the Get Rich Slowly website, What Does It Take to Make You Switch Banks?, asks that very question and poses a few scenarios. Are there any of the following points that would cause you to switch your banks:

  1. Higher interest rates on borrowings than the competition?
  2. Lower interest rates on savings?
  3. Poor customer service?
  4. Length of history with your current bank?
  5. The principle of the thing?
  6. Accessibility – particular now with branch closures

Another way of looking at this would be if you imagined what a bank outside of Ireland might be thinking when looking at Ireland to see if it’s worth coming into the market.

We’re going to hear much bleating in the coming weeks and months about the reduction in competition in the banking market, but if people aren’t inclined to switch banks (even during times when we had plenty of competition), what’s the point in calling for more competition if most people are going to stick with the old unreliables?

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How to get free groceries – according to Dr. James Reilly, TD

There was an exchange in the Dail last week (as recorded on KildareStreet.com) where Dr. James Reilly, Fine Gael TD for Dublin North provided an insight into how consumers can get free groceries.

James Reilly
I wish to raise two matters. First, as a result of all the recent hospital bed closures around the country, people have to wait even longer for service and lie on trolleys for even longer then they did hitherto. Will the Taoiseach inform the House when the eligibility for health personal services Bill will be introduced? Will he consider inserting a provision in that Bill that if a person is waiting more than two hours in an accident and emergency department, he or she should not have to pay the fee of €100?

Bernard Durkan
Hear, hear!

James Reilly
There is a precedent for such a provision. If customers are waiting in some supermarkets for longer than 25 or 30 minutes, they will not have to pay for their groceries.

I must say, this is a new one on me. Does anyone know which supermarkets provide this service?

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Another reason not to get involved with gift vouchers – I’m losing count now

One of the more popular pages on this site is my constantly updated feature on reasons not to get involved in using gift vouchers – you can see the latest update here.

An oldish story in the Irish Times further highlights that recommendation – Consumers warned to redeem gift vouchers without delay.

The story refers to the policy of the then “about to close down” Hughes & Hughes to not honour any outstanding gift vouchers in the run up to their closing.

All you can say really is what complete and utter scumbags they are – seeing actions like this you’d have to say “no loss” to their closing down if that’s the way they’re going to do business.

Yes, yes, I know that circumstances were different then with their running out of money and shutting down, but in fairness, if that kind of stunt is symptomatic of how they normally ran their business, then we’re better off without them.

Still though, despite the bleating from the Consumers Association of Ireland (we haven’t heard from them in a while) and the National Consumer Agency, Hughes & Hughes were completely within their rights to do this as they had probably catered for it in the terms and conditions of using (or not using) their vouchers.

According to the article, the CAI had the following potentially misleading, and ultimately pointless comment to make:

Consumer Association of Ireland (CAI) chief executive Dermott Jewell said it was “not acceptable” for Hughes Hughes not to redeem the book token while branches were still open. “The consumer holding the voucher would have a contract with that company as long as it is still trading.”

A contract, yes, where there are terms and conditions in place which the consumer would have signed up to by getting involved in the vouchers in the first place.

Maria Hurley from the NCA, apparently echoing someone from the receivers, Deloitte, at least had the factual – if not altogether helpful for the consumer – comments to make:

A company which goes into receivership does not have to honour gift vouchers, even if stores are still open. After a receiver is appointed, he or she is responsible for all subsequent decisions affecting the business, including whether gift vouchers are honoured, she explained.

I’ve said it before. I’ll say it again. In this current environment where you don’t know which businesses are ultimately going to survive, stay away from vouchers, credit notes, lay aways and even deposits – basically any situation where you give money up front to a business in expectation of a future delivery of a product or service.

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11850 moving Irish jobs to the Philippines – boycott anyone?

Twitter was abuzz last week of news that the company behind the 11850 directory enquiries service 11850 was closing down its Irish base with the loss of 78 jobs and moving them to the Philippines.

The story was covered last Thursday in the Irish Independent – Directory firm 11850 outsources 78 jobs to Asia. According to Twitter sources, the company behind 11850 is actually American, and it seems they’re turning to their global network for cheaper resources:

“Inevitably, the economic downturn has taken its toll on consumer and business spending, resulting in a decline in call volumes as a whole to all the 118 services.

“As a result, action is required to ensure the future delivery of services, and 11850 is fortunate to be able to draw on its global resources to meet that important objective and licence commitment.

The move to the Philippines did prompt some questioning as to how the new 11850 operators might be able to handle uniquely Irish names and place names. I wonder will they do as some British companies did when outsourcing jobs to India and bring the employees to the UK for some “immersion” training, and then make them watch Emmerdale, Coronation Street and Eastenders when they went back home.

Some people on Twitter also suggested that they would begin boycotting the 11850 service because of this move costing Irish jobs.

Boycotting is good! To be honest, we’re not good in Ireland at boycotting those companies that screw consumer around – how many people are still customers of the big banks despite everything they’ve done.

But would you be out of pocket if you stopped using 11850 and used another of the 118* services?

Back in 2008 I did some research (available here – Directory Enquiries Options and Costs) on the cost of calling directory enquiry services. At that time, the 11888 option was the cheapest, while the 11890 service was the fastest and best value for money option.

The SaveAFewBob.ie crew have recently provided an updated analysis on the costs of calling directory enquiries here – Directory Enquiries – Are you paying too much?. It seems that things haven’t change much in two years with this recent research also finding that 11888 was the cheapest option.

The sting in the tail though, is that 11888 is operated by the same people who run the 11850 number. So, if you’re boycotting 11850, you should also boycott 11888.

But then using the 11890 or Eircom 11811 alternatives is going to cost you more money.

The perennial dilemma for Irish consumers – pay dearly for your principles, or sell out for the cheaper cost!

Then again, you really shouldn’t be using directory enquiries services at all these days. Have internet on your phone? Is it free? A Google search for most businesses these days provides the contact numbers in the search results before you even have to click into the website.

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Buy Irish? Make sure you check the small print

I wrote recently about some comments in the Seanad and elsewhere from people concerned that Irish consumers were sometimes being conned into buying products that they think are Ireland, but are in fact not.

Here’s a great example from Tesco towards the end of 2009. Firstly, check out this picture of a display of toilet paper – you’d be forgiven for thinking that this stuff was made in Ireland.

And you’d be wrong – check out the small print from the back of one of the products:

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More on Ireland’s Departure Tax

I wrote earlier this week about how, while I’m no fan of the governments departure tax, I don’t believe it can be blamed as much as it currently is for the woes in our tourism industry.

I questioned whether anyone actually knew which other countries charge a tourism tax as a way to illustrate how insignificant such a tax is when it comes to tourists deciding on where to visit.

I did some amount of web research trying to find a definitive listing of which countries charge a departure tax, but without much success. The waters are further muddied by the vast array of charges levied on air passengers (and again, probably unknowingly to most air passengers – just think DAA charges levied in Dublin as an example).

As an example, however, take the United Kingdom charges for example.

• For short-haul flights of less than 2,000 miles in economy-class – £11
• For journeys of between 2,001 miles and 4,000 miles – £45 for economy, £90 for business class and first class
• For journeys of 4,001 miles to 6,000 miles – £50 for economy and £100 for business and first class.
• For flights of more than 6,000 miles – £55 for economy and £110 for business and first class.

How do you feel now about our flat €10 tax?

If anyone can point me towards a listing of countries that charges an airport departure tax, drop me an e-mail via the Contact Page and I’ll publish the information here.

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Ireland’s Departure Tax – which came first, the tax or the drop in passengers

The topic of this blog post has been going around in my head for some time now, never quite making the light of day until now – so here goes. Actually, this will be the start of a bit of a tourism theme for the week.

It’s said that the €10 departure tax brought in by the government in one of their many recent budgetary attempts brings in something between €10m and €15m per month. It was expected to net €9m in 2009 and €150m in a full year.

While this tax is undoubtedly a regressive measure, we’re being told that it is because of this tax that airlines are flying less passengers to Ireland – Aer Lingus and Ryanair shouting the loudest on this one.

Yet, back in 2008, Tourism Ireland revealed that the number of tourists visiting Ireland in that year had fallen 3.3%.

Had the rot already set in even before this departure tax was decided upon?

The number of tourists visiting Ireland for a holiday dropped 20% in 2009, but given the turmoil experienced around the world because of a world wide recession, is that not the primary reason for the fall rather than this new departure tax?

Look at this another way.

Let’s assume you’re planning a holiday later this year, 2010. You’re going to fly somewhere. What dictates where you go? When you search the internet researching destinations for your holiday, do you check out hotels, attractions, sights, entertainment and places to eat, or do you first check how much is the departure tax that you’re going to have to pay when you leave?

Do you even know which countries you might visit charge a departure tax? When the tax is included in your air fare (as it is here in Ireland) you’re most likely never even going to know you’re paying such a tax.

The overall price of your vacation will determine when and where you travel – and if you’re flying somewhere, staying in a hotel and eating out for a couple of nights over a weekend, then the €10 cost of the departure tax isn’t going to be the deciding factor.

Ireland was, and still is, a very expensive destination for tourists to visit – it was in the good times, and in general (despite the fall in hotel costs in many locations), it still is now.

When potential tourists are experiencing recession in their own country and counting the pennies, we can hardly expect that they’ll be arriving here by the plane load if they’re going to have to pay through the nose for the privilege of spending a few days in Ireland.

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