CONSUMER REVIEW OF 2010:It was the year when high prices were revealed, arrears became a reality for many and consumers realised their power – just at the point when they were either too nervous or too broke to spend any money
JANUARY
At the beginning of the year, the country was awash with upbeat forecasts and everyone was optimistic about where we were, where we were going and how we were going to get there. If only. As the new year dawned under a blanket of white snow, the country was chronically depressed following 18 months of wage cuts, tax hikes and job losses and the only hope that most of us clung to was that things could only get better. We were wrong.
The first weeks of January saw the country’s transport system grind to a halt as buses, trains, taxis and aircraft fell victim to snow. We ran out of salt and grit, and just as Met Éireann was predicting fresh snowfalls of 25cm or more, it all disappeared.
Reports of the rise of the savvy shopper and the guilty consumer almost got buried in the snow, but repeated surveys kept showing that people were switching and complaining in numbers which would have been unimaginable during the boom.
“We’ve gone from a situation where consumers didn’t know the price of anything to a situation where price and value is now everything,” Ian McShane, managing director of Behaviour and Attitudes, told one conference. His comments were echoed by Ann Fitzgerald, the head of the National Consumer Agency (NCA), who said most Irish consumers now knew how and when to complain and were a whole lot more likely to do so.
Another conference, organised by Checkout, the magazine for the retail sector, heard that consumers would never recover from the guilt they felt about their wanton consumption during the boom years – even those whose consumption wasn't particularly wanton. Just as those who lived during the Great Depression were destined to be frugal forever after, Irish shoppers will always seek value now that the boom is over.
One cohort who felt no guilt as they went about their business was the nation’s thieves – particularly shoplifters. It emerged this month that shoplifting was costing Irish supermarkets around €150 million a year and light-fingered folk were pushing prices up for the rest of us.
The Government announced plans to introduce a statutory code of conduct for grocery retailers and suppliers, despite howls of protest from the bigger operators who claimed it would push up prices. The then Minister for Enterprise Mary Coughlan said she would introduce the code and an ombudsman to referee disputes in the grocery sector.
FEBRUARY
A report commissioned by the Irish Farmers Association (IFA) found that farmers got just one-third of the final retail price of the goods they produced.
With more and more householders finding themselves in mortgage arrears, a moratorium on house repossessions was extended to 12 months for all lenders. The change, ordered by the Financial Regulator, meant all lenders would have to wait at least a year from the time arrears first arose before applying to the courts for a repossession order. The moratorium would not apply where a borrower had deliberately not engaged with the lender.
MARCH
In news that shocked almost no one – except perhaps the press officers with the big retailers who kept insisting they offered amazing value for money – it became clear that Irish consumers were paying over the odds for groceries. The reason was hardly any more surprising – multinational retailers were making up to three times the profits in the Irish market as they were elsewhere.
They were also behaving unethically by using their market power to impose unfair conditions on suppliers, an Oireachtas report claimed.
Plans for a new traffic light system for food packaging were derailed after MEPs rejected proposals for colour-coded warnings on packaging as a means of highlighting the fat, salt and sugar dangers lurking within. The defeat of the traffic light proposals was seen as a victory for big food companies who had lobbied vigorously against it.
It was a bad month for Play TV, TV3's late-night game show. It was axed. The station blamed a fall-off in viewers but it had been the subject of numerous complaints to the Broadcasting Authority of Ireland since it first aired in May 2009, with many saying the questions it asked were impossible to answer.
APRIL
No one could pronounce it but few will forget it. When the Eyjafjallajökull glacier in Iceland erupted, it was ignored by pretty much everyone. Then the plume of ash started grounding flights and within hours, there was unprecedented chaos across Europe. Much of Europe’s airspace was shut down leaving travellers stranded. Ryanair’s Michael O’Leary was forced into a somewhat embarrassing climbdown after he said the airline wouldn’t offer compensation above and beyond the cost of tickets.
It was explained that the law was the law and the law said airlines must offer meals, refreshments and hotel accommodation where a stay of one or more nights was necessary. O’Leary was told airlines would face large fines if they failed to adequately reimburse passengers stranded by the chaos.
An advertising campaign for Hunky Dory crisps, featuring women in revealing tops playing rugby under straplines such as “Are you staring at my crisps?” and “Tackle these”, attracted a large number of complaints to the advertising watchdog. The campaign, which cost Largo Foods €500,000, was branded sexist and depressing, and the Irish Rugby Football Union (IRFU) sent the company a solicitor’s letter demanding the campaign be pulled because of a reference to the crisps as a “proud sponsor of Irish rugby”.
Clothes retailer Primark also got into hot water after its sale of padded bikini tops for children was condemned by children’s rights groups. The company withdrew them, apologised for any offence caused and said all profits from the bikinis already sold would be given to a children’s charity.
MAY
As summer started, the NCA showed that young drivers could save themselves over €2,200 a year by switching insurers when renewing cover. In a separate survey, the agency exposed a massive difference in the fees charged by dentists and GPs across the country. Patients of one GP in Dublin 4 were paying €70 for a consultation, twice the lowest fee, which was charged by a doctor in Co Kerry. The biggest cost variations were in dentistry, where the cost of a simple tooth extraction varied from €40 to €150 depending on where you lived.
The ash cloud made a brief return and caused more disruption to air travel but nothing compared to the chaos in April.
The Hunky Dory crisps ads were withdrawn after attracting over 300 complaints from the public and the IRFU threat of legal action. Largo foods were hardly complaining however, as the acres of newsprint the story generated could not have done their business any harm.
JUNE
The Cliffs of Moher, Ireland’s second most popular tourist destination after the Guinness Storehouse, introduced a controversial €6 entrance charge per adult and child over 12. The age limit for children was subsequently extended to 16 but ultimately was not implemented.
The big retailers were still moaning about proposals to create a supermarket ombudsman and claimed in submissions to the Department of Enterprise that it would push up food prices, put shop staff out of work and lead to a resurgence of cross-Border shopping. The main farming bodies and representatives of suppliers and manufacturers backed the proposals.
A survey published by the Consumer Association of Ireland found that women were paying up to three times the price paid by men for essentially the same beauty products. Razors, deodorants, moisturisers and shower gel all cost women more, and manufacturers and retailers couldn’t give a satisfactory explanation for the differences. A pack of 10 twin-blade disposable razors for men costs €1.65 in Boots, for example, while the same product for women costs €2.99 for just five razors – a difference of over 260 per cent. In Tesco, own-brand razors for men cost €1.05 for 10, for women the price is the same but for just five razors.
Plans by the Minister for Communications Eamon Ryan to designate key rugby matches as free-to-air for television came under fire. The IRFU was hopping mad and warned it would devastate the sport. It said it would cost the IRFU up to €12 million a year and put an end to the sport’s mass appeal.
A survey published by Eurostat showed that Ireland had the second-highest prices for food and non-alcoholic drinks in the EU. It revealed that despite more than 15 months of deflation, prices here were nearly 30 per cent higher than the EU average. In the UK, by contrast, prices were just 3 per cent above average.
JULY
Consumers were cut some slack when it came to using their mobiles to surf the web when abroad – as long as they stayed in the EU. A €50 cap on roaming data charges came into force after a ruling by the European Commission. Users would have to actively request to be allowed spend more than that.
Apple fans queued to buy the iPad on its launch in Ireland but fears (stoked up by people who had read too much from the Book of Jobs) that supplies would run dry proved unfounded and there were iPads for all. Well not all, but all who were prepared to shell out at least €499 for the sleek gadget.
Arnott’s windows were plastered with iPad ads on the day Anglo Irish Bank and Ulster Bank moved in to take control of it. The takeover came about because of the store’s inability to service borrowings of more than €250 million. The oldest department store in Dublin, one with a storied history, was at pains to stress it was performing “very strongly” and it insisted its 950 employees’ jobs were secure and it was “business as usual”.
Some 43,000 bank users got some rare good news when they learned they were due around €3 million in refunds from Bank of Ireland after they made ATM withdrawals between 2005 and 2009 without taking their money. Apparently the most common reasons people walked away from ATMs without their cash was incoming mobile phone calls.
AUGUST
Air travel was found to have attracted the largest single number of cross-border consumer complaints according to the annual report of the European Consumer Centre in Dublin. The vast majority of the complaints handled by the centre were from consumers in other European countries complaining about Irish airlines, according to the report. We can only speculate as to which airlines those may have been.
SEPTEMBER
It was claimed that Irish consumers were being “mercilessly fleeced” by being asked to pay over-the-top mortgage interest rates to rebuild the balance sheets of the banks. The Financial Regulator’s consumer panel found that householders who did not have tracker mortgages were being treated as “second-class citizens” and were forced to pick up a disproportionate share of bank rescue costs. The panel said many consumers were paying higher rates than before the economic crisis hit, and were not benefiting from low ECB rates. The bank federation refuted the charges and said at least half of all mortgages were trackers.
Almost 2,500 households per month had their electricity supply disconnected after failing to pay their bills, the energy watchdog confirmed. The number of disconnections of ESB, Bord Gáis and Airtricity customers doubled in the four months to July, according the figures from the Commission for Energy Regulation.
The lights went out on clear-glass bulbs of 75 watts or more as a complete ban on old-school light-bulbs gathered pace. The most commonly used bulb, the 60 watt, will be withdrawn from September 2011, and less-powerful bulbs will be banned by 2012.
OCTOBER
There were few smiling faces when the prices for the four autumn rugby internationals against South Africa, New Zealand, Argentina and Samoa were announced.
Initially, the IRFU tried to sell them as a package with stand tickets for four games costing €340, an average of €85 per ticket. Fans cried foul and it was forced to rethink its strategy. It agreed that tickets for the November tests could be broken into a pair of two-game packages. Then, as it struggled to sell the tickets, it was forced to admit it had got its pricing strategy all wrong. It introduced a new tiered price structure and reduced prices for the Six Nations games against France and England.
Banks will have to impose stricter financial stress tests on mortgage applicants if and when new rules on lending, from the Central Bank, are adopted next year. The proposals are aimed at toughening up the four-year-old Consumer Protection Act. If the new rules are adopted, lenders will have to assess a consumer’s ability to repay borrowings in greater detail than has been the case before they approve a loan. Lenders will also have to assess the impact of a 2 per cent interest rate rise on a consumer’s ability to repay.
According to the consumer agency, people are now price conscious, thrifty, more willing to complain and better money managers. The passivity which was once a hallmark of Irish consumers has gone and people are shopping around for better prices.
Rural households need up to €109 a week more for essentials than city dwellers because of higher food and transport costs, according to a study. Large numbers of rural dwellers cannot afford a minimum essential standard of living if they are on social welfare or the minimum wage, a study by the Vincentian Partnership for Social Justice found.
NOVEMBER
Forget April, November was the cruellest month. It was all bailouts and hairshirts as the IMF came to town and the Government published it four-year austerity plan – or recovery plan if you’re so inclined. The sight of IMF and ECB officials strolling from their quarters in the Merrion Hotel to the Central Bank was depressing but probably not as depressing as the austerity plan.
Almost one in 10 Irish mortgages is in arrears or has been rescheduled, according to figures from the Central Bank.
Over 40,000 mortgages, or 5.1 per cent, were in arrears for over 90 days at the end of September – up from 26,000 a year ago. In 28,000 of these cases, the arrears were over 180 days. The number of households in arrears on at least one bill or loan continued to grow. According to an annual survey on income and living standards by the CSO, 60 per cent said they had difficulty making ends meet.
DECEMBER
The Budget was the only show in town at the beginning of this month – well that and the Rubberbandits's Horse Outside. When the Budget was published you could almost hear the collective intake of breath as people came to terms with what frontloading €6 billion in cuts actually looked like. Irish consumers will see over €3,000 disappear from their pay packet following the harshest budget in a generation – or several generations. A couple with an annual combined household income of €75,000 will see their pay packet shrink by €1,815 or €151.25 per month following changes to tax bands and credits. That's a decline of 3.6 per cent. And there are more cuts on the way.
On Budget day, the Bank of Ireland suffered a major computer fault and 1.2 million customers lost access to phone, ATM and internet banking. The bank’s ATMs operated in off-line mode which meant customers with money in their accounts were often unable to withdraw what they wanted, while customers with no funds were able to take cash out. There’s no such thing as free money, however, and those who’d taken out “unauthorised overdrafts” have to pay it back. There was some, comfort for those struggling to make ends meet as charges for reconnecting electricity or gas was halved. The measure, which take effect from later this week will cut almost €100 off the current cost of reconnection to electricity and gas supplies. The Commission for Energy Regulation has decided to go ahead with the change, despite opposition from the utility companies.
