Lack of competition keeps Swiss prices high

Consumers pay dearly for high Swiss prices (Keystone) Keystone

Switzerland is the most expensive country in Europe, ranking higher even than Scandinavian nations.

The economics ministry has blamed high prices on a lack of competition and said the issue needed addressing.

Figures from Eurostat, the Statistical Office for the European Commission, show that Swiss prices in 2001 were the highest in Europe, followed by prices in Norway and Denmark.

Ever since Eurostat first began compiling these figures in 1990, Switzerland has consistently ranked as the most expensive country in Europe.

The Swiss economics minister, Joseph Deiss, says action must be taken to bring prices down.

“For many years we justified our high prices because of our high quality goods and comparatively high prices,” Deiss said. “But that’s not acceptable anymore.

“For Switzerland to remain economically attractive, it must maintain its quality while bringing prices down.”

Deiss believes major sectors such as electricity, health and agriculture need to be deregulated in order to boost competitiveness.

He points to the drop in prices brought about by deregulation in the Swiss telecommunications sector.

He also supports a liberalisation of some the major public institutions and greater harmonisation with the economic structures of the European Union.

Cartels under fire

The State Secretariat for Economic Affairs (Seco) also blames Switzerland’s high prices on the cosy arrangements made between multinational manufacturers and Swiss importers and distributors.

Multinationals frequently have exclusive distribution rights in Switzerland, enabling them to fix a high price with the distributors for the Swiss market.
This prevents parallel imports, which would allow Swiss retailers to find a cheaper supplier elsewhere.

It is an arrangement which would be impossible if Switzerland were a member of the EU, where the European Commission can bring its competition regulations to bear on cartels and unfair trading practices.

“Even if cartels have become in a way part of our national folklore, we must open these sections of our economy to greater competition,” Deiss said.

Seco’s research shows that Swiss consumers are paying dearly for the lack of competition in their country.

It’s believed Swiss households could save SFr19 billion a year on consumer goods alone, if prices were lowered due to increased competition.

And, Seco says, Switzerland’s tourism sector is suffering too because Swiss restaurant and hotel prices compare unfavourably with those of neighbouring countries.

swissinfo with agencies

Key facts

Swiss prices have ranked as the highest in Europe for over a decade, according to Eurostat.
Bringing prices closer into line with neighbouring European countries could save Swiss consumers around SFr19 billion a year.
The Swiss economics minister, Joseph Deiss, believes deregulation and greater competition are key to bringing prices down.