Price watchdog comes under pressure

Werner Marti's departure has spurred new attempts to scrap the price regulator Keystone

Rightwing groups and business leaders have leapt on the resignation of the Swiss price controller to call for the post to be scrapped.

But the price watchdog is very popular in pricey Switzerland, the only European country to have the office enshrined in the constitution.

The watchdog’s boss, Werner Marti, is quitting to join the race for leadership of the centre-left Social Democratic Party.

He is angry with the rightwing Swiss People’s Party, which launched a people’s initiative to scrap the government office, just one day after Marti’s resignation.

“The People’s Party always claims to act on behalf of the people,” Marti told swissinfo. “But it’s overlooked just how popular this office is among the Swiss.”

The price controller is a coveted post in Switzerland and is a springboard to bigger things. Marti’s predecessor was the current Swiss president, Joseph Deiss who, as economics minister, is effectively the country’s highest-ranking price tsar.

The first ever price controller, Leo Schürmann, became vice president of the Swiss National Bank and head of the Swiss Broadcasting Corporation.

But the office, comprising a dozen staff, has had its detractors ever since it was set up.

Lower prices

The Swiss Business Federation, economiesuisse, called for it to be scrapped eight years ago, saying only a liberalised market could lead to competition and consequently to lower prices.

But for Marti, this is an unconvincing argument. “You can’t complain about high rates but also want to get rid of the only office responsible for regulating prices.”

The controller has scored a number of victories, such as blocking an increase in the price of fixed-line telephone connections and reversing a hike in charges for cable access.

The office has also managed to prevent dentists’ and doctors’ fees from spiralling out of control and it forced independent notaries to revise their rates downwards.

But despite these efforts, Swiss consumers still have to pay a high price for goods, estimated at between 25 and 40 per cent above the European average.

Fight

“At least people finally recognise that Switzerland does have high prices,” Marti says. “When I first took up the post eight years ago, I had to fight for people not just to accept this as a fact of life.”

Critics, including those from the Left, say successes have been limited and have taken too long to come about.

“Where we haven’t been successful, it’s because price [cuts] have been blocked by political decisions,” Marti argues.

Prices for medicines and agricultural products are regulated by the state, while brands and designer labels come under the brand protection law, he says.

Parallel imports

There is also still a ban on so-called parallel imports of household and electronic products. These are goods made abroad which retail at lower prices than their Swiss-made equivalents.

“This allows multinationals to demand higher prices in Switzerland than abroad,” Marti explains. “We can only tackle prices where there’s no competition. This is an area deemed to be open to competition.”

But Marti is hopeful that a new law, due to come into force on April 1, will resolve some of these problems.

The legislation will give the Competition Commission greater power to fine companies which are found guilty of rigging prices and blocking competition.

Despite leaving his job, Marti has pledged to continue the fight against high prices. “I don’t intend to keep quiet on this issue.”

swissinfo, Andreas Keiser

Price watchdog

Prices in Switzerland are between 20 and 40% higher than the European average.
Werner Marti is resigning as price watchdog to run for leader of the Social Democrat Party.
Marti has been the price controller for eight years and a parliamentarian since 1991.