Jesus! Why did you Britons put up with this stuff for so long!
So this is how the EU works.
That’s silly, don’t ask; the EU is made up of separate countries, and the lower prices quoted are from other EU nations.
This is actuall yhow an island nation works. Ireland’s even worse. Captive populations.
Most likely, if the law passes, you’ll see prices go up in other countries, and prices drop somewhat in Britain. If you’re a company like British Air, and you are trying to increase your market share in France, you’ll cut your profits to the bone to get market share. In Britain, where you likely have a large share of the market, you charge what the market will bear. Fiddling with this may mean slightly lower prices in Britain on some things, but it will mean less competition. Why would you want to use British Air when you could probably use Air France without the stopover at Heathrow, if it cost you the same amount of money? As far as the computer goes, if your expensive computer is selling better in Britain, where the wage rate is probably higher than in Spain, then you will probably cut the price in order to sell more of them.
I can’t explain the internet car rental deal, though.
But isn’t the idea of the EU that the separate countries form some kind of union?
Captive? Isn’t the chunnel like a big bridge? Does it really cost a shipper 100-300 pounds extra to schlep a 20 lb PC notebook retail box through the chunnel vs what a Frenchman pays? What happened to the English mercantilist spirit? I thought you guys were world class bargainers.
There is a negation of trade and tarrifs between the EU members, and monetary union between some of the members, but that doesn’t mean that services that are only available in one country somehow gain the same price as in other countries. It’s still “what the market will bear”.
Clearly not any more.
But not a perfect union. If you go across the United States, for example, I’ve noticed that the same product in the same store will sometimes not be the same price. Lowe’s seems to be a big offender at this. If there’s a Home Depot close by, the prices will be lower than if they don’t have this competition.
A lot of these “business practices” of charging what the customer will bear are hangovers from the days when we traded as an island nation and Europe was somewhere else.
One example is the cost of cars, manufacturers fought for years to maintain their huge profit margin on British sold vehicles. We had all the excuses imaginable why there was such a large differential on prices e.g. different standard of accessories, better after care…
The internet, has helped by allowing people to order and collect cars from the continent (of Europe) at a cheaper price. The dealers there are only too pleased to sell to Brits as it’s still profit to them. The manufacturers tried putting pressure on the dealers by threatening to withhold their cars from them. Eventually through a combination of legislation and publicity car prices have dropped a bit.
Businesses anywhere will fight tooth and nail to keep their profit margins as high as possible.
Levi Strauss went to court to stop one British supermarket selling their goods cheaper than the recommended price.
Small correction, there’s no such company as British Air, I’m sure you mean British Airways. They have been called lots of things mostly uncomplimentary but not that
Average incomes in England are far higher than those in France. The companies in question are simply charging what the different markets will bear.
Perhaps I’m missing the obvious, but shipping charges aside, I didn’t find an answer in the article to why they were charging the British more.
What the others said.
Anyway, the role of the EU in trade is to form a free market, basically. That would tend to bring prices closer together, but there are many other reasons why prices may be different, apart from government barriers to trade, namely, supply and demand.
That said, the EU has levelled the playing field somewhat, by not allowing unfair state aid to their nation’s comapanies, regulating standards so that goods, especially electrical, do not suffer from barriers due to incompatible standards.
Like many others have said, supply and demand. The Brits will pay more, so they charge more. End of story. Why do you expect the companies to charge less when they know that they can charge more?
Capitalist greed: companies will charge what people are prepared or able to pay.
It’s a slow process, but there are changes happening. A friend of mine travelled from the UK to the Netherlands to buy a Subaru Impreza. He got a model for use in drive-on-the-left countries, and saved himself nearly £10,000.
In Ireland there are German supermarket chains opening up (Lidl, Aldi) that sell foodstuffs for 50% of their Irish counterparts.
Because they will sell more.
Perhaps the British should refuse to deal with companies that charge them an arbitrarily higher price. I know that is being simplistic and unrealistic, but if the loyal customers of my store were to suddenly and in concert refuse to pay what we charge them for engraving, and were to inform the company that they felt our engraving charges were too high…or if another company began to offer engraving services cheaper than ours and as convenient as ours in close proximity to us…prices would change. Especially if they bought the product from us and had it engraved elsewhere, because then all our profit would disappear. Yes, I know this is a bad example and short-sighted. But for non-necessities (like books and electronics) the customer does have some power.
It’s like the lettuce shortage we had a few years back. All of a sudden, due to a bad freeze, lettuce prices went sky-high. Instead of $1 a head, it was $3 a head. There seemed to be as much lettuce in the stores as before . The problem was that nobody bought the $3 lettuce, and it rotted in the stores and the store lost money. So their attempt to make more money on lettuce backfired. When they dropped the price to $1.25, people didn’t feel gouged and bought more lettuce again. They ended up making more money.
In some cases, that’s not the simple answer. Such as in the OP, there’s only a fixed number of business class seats on each BA flight. So if the British market can manage to fill most of them with a thumping profit, then so be it. (Of course, BA’s profits suggest they’re not managing to run their business this well, but that’s another matter.)
When the opportunity is there, we do - such as with the growth of low-cost airlines. But often there simply is no viable alternative, which is why legislation is being suggested.
Just a question–I have no idea what the answer might be–but is it possible that taxes are higher in Britain than France? Import taxes, export taxes, sales taxes, airport taxes, etc? As I recall, the Value Added Tax in the UK by itself is pretty substantial, and it is built into the price of most products and services, rather than added to the total as a separate line item. What would the British/French price differential be like if you excluded taxes?
Cite? A quick check of the CIA World Factbook places the per capita GDP of the U.K. only very slighter higher than France. Of course, it could be France has a much more unequal income distrobution, leaving the typical Englishman with more money to spend than your median Frenchmen that marketers are aiming at, or there could be a significant difference between the English & other members of the U.K. in income level.
Just curious to see what the case is.
Ack, I just remembered that the CIA World factbook uses a purchase-parity benchmark when calculating income levels, not direct conversion of currency. So if an average Englishman made more than the average Frenchman, but paid more for everything, their purchase-parity levels would be about the same. That could explain your observations as well.