MaltaToday: Food and health prices twice those of Europe
NEWS | Sunday, 20 January 2008

Food and health prices twice those of Europe

Clothing seven times costlier than EU average. By David Darmanin

Presenting the findings of a comparative study on cost of living, Malta Labour Party acting leader Charles Mangion yesterday said prices in Malta are increasing at a much faster rate than the average in other Eurozone countries.
Referring to statistics published by the National Statistics Office (NSO) and Eurostat, Mangion explained that between October 2006 and December 2007, prices of food and health products in Malta increased by almost double than that of other countries in the Eurozone. With clothing, the increase is almost seven times higher.
“If, as government is stating, prices are soaring due to a general price increase in other countries, one would expect that prices in Malta would increase at the same rate as the EU,” Mangion said. “What is even worse is that on average, for every €100 earned in the EU, the Maltese are earning €40.”
Mangion insisted that the NECC and the department for consumer affairs should react to this or else admit that NECC “is simply not effective or that its whole foundation was simply an excuse for the creation of employment of a few blue-eyed boys.
“We need to look into the reasons for these excessive price hikes,” he added. “Is it because there is too much bureaucracy in Malta? Or maybe because there is an element of monopoly or unfair competition?”
GRTU Vice-President Philip Fenech agrees that during the period Mangion mentioned, prices of imported products have soared and that “lots of them are still on the increment. We have heard numerous comments on this.”
For the retailer, he states, this often has to do with external forces. “More often than not, people in the retail trade will much prefer decreasing prices because it will simply make them more competitive.”
Looking into the possible reasons leading to the situation, Fenech immediately ruled out the rounding up factor during the changeover process, claiming that this has only contributed to a prices increase of 0.00125%, although public perception is quite different.
“This does not mean that the Euro hasn’t affected cost of living, but if so it is not because prices were rounded upwards.”
Fenech went on explaining how flat rate payment for certain services have inevitably increased. “If cleaners were paid Lm10 for services, chances are that rather than €23.29 they will be paid €25 as a round figure. Another factor is more practical. With the €5 note, replacing the Lm2 note is valued Lm2.33 whereas the €2 coin, replacing the Lm1 coin is valued Lm0.86. What this means is that there will be sudden variations in transactions like tipping, which in some cases has been reported to have decreased by a third.”
Fenech agreed with Labour that this sudden increase may be also due to inefficiencies caused by governmental institutions, but he didn’t stop there. “Inefficiencies in our economy compared to other places in EU are far and wide. The way Malta works in terms of banks, the airport, our seaport, Pitkali, the fisheries and our distribution chain all contribute to the increase in costs. Efficiency needs to be compared to the EU as much as pricing. These are technical arguments that need quite an elaborate analysis.”

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