We have lived in Europe for nearly 12 years. In that time have been amazed at the price differential between the UK and Europe: almost everything you buy online is 30% more. Books, vinyl records, domestic appliances and clothes are specifically troublesome.
Amazingly it is also difficult to source certain items even those that are not quintessentially British…
Before everyone gets excited about the effect of BREXIT, this was the same before and after.
VAT is not a factor as Portugal’s standard rate is 23% and Germany's 19% as opposed to the UK’s 20%. I consider currency fluctuations but they are not significant given the scale of the imbalance.
I can give you many examples but first, let’s discuss and look forward to your comments.
I am not sure everything is always, without fail, more expensive in Europe. There are, however, a number of factors at play:
1. Competition: There’s a lot more competition in the UK compared with most European countries. More competition means more options for consumers and lower prices as sellers compete.
2. Regulation: There’s a lot more regulation and bureaucracy in Europe, from trading hours to licences and government intervention. These factors lead to higher prices as they artificially limit supply.
3. Wages and Labour Rights: Linked to number 2 above, in *some* European countries (particularly Scandinavia and Switzerland) the minimum wage is a lot higher than average, which means more costs for the employer and therefore higher prices. In some southern countries, while wages may be lower, there tends to be higher employee protection such as more onerous employer pension contributions which, again, increase costs and therefore prices.
4. Taxes: Other taxes, apart from VAT, are likely to play a role. European countries tend to levy more taxes on businesses which means the costs of trading are higher, which, again, leads to higher prices.
5. Higher costs: Generally speaking, the costs of doing business in Europe tend to be higher (from incorporating a company to the time it takes to pay a tax bill). Businesses pass these costs onto consumers as otherwise many ventures would not be viable.
Generally Europe is less business friendly than the UK and this invariably ends up harming the consumer.
Thanks for the detailed response Andre. I can see that now, certainly the regulation and bureaucracy. The UK is an excellent place to set up a company or go self employed.
It’s a total nightmare here in Portugal: France and Spain also. The average income in Germany is quite a bit higher than the UK and that is clearly a factor.
We have lived in Portugal for four years and still don’t understand the economic dynamics of our adopted country - nothing stacks up - but perhaps that’s another discussion.
Yes, exactly. Portugal is a lovely place but I can imagine living there must have its challenges particularly when you’re trying to grow or expand a business.
Indeed. It’s only online we have noticed it really. Food in Europe seems to be the same price everywhere, apart from France where is monstrously expensive. Of course in Portugal this causes enormous problems as the average wage here is 25% of Germany. Yes, 25%.
I am not sure everything is always, without fail, more expensive in Europe. There are, however, a number of factors at play:
1. Competition: There’s a lot more competition in the UK compared with most European countries. More competition means more options for consumers and lower prices as sellers compete.
2. Regulation: There’s a lot more regulation and bureaucracy in Europe, from trading hours to licences and government intervention. These factors lead to higher prices as they artificially limit supply.
3. Wages and Labour Rights: Linked to number 2 above, in *some* European countries (particularly Scandinavia and Switzerland) the minimum wage is a lot higher than average, which means more costs for the employer and therefore higher prices. In some southern countries, while wages may be lower, there tends to be higher employee protection such as more onerous employer pension contributions which, again, increase costs and therefore prices.
4. Taxes: Other taxes, apart from VAT, are likely to play a role. European countries tend to levy more taxes on businesses which means the costs of trading are higher, which, again, leads to higher prices.
5. Higher costs: Generally speaking, the costs of doing business in Europe tend to be higher (from incorporating a company to the time it takes to pay a tax bill). Businesses pass these costs onto consumers as otherwise many ventures would not be viable.
Generally Europe is less business friendly than the UK and this invariably ends up harming the consumer.
Thanks for the detailed response Andre. I can see that now, certainly the regulation and bureaucracy. The UK is an excellent place to set up a company or go self employed.
It’s a total nightmare here in Portugal: France and Spain also. The average income in Germany is quite a bit higher than the UK and that is clearly a factor.
We have lived in Portugal for four years and still don’t understand the economic dynamics of our adopted country - nothing stacks up - but perhaps that’s another discussion.
Yes, exactly. Portugal is a lovely place but I can imagine living there must have its challenges particularly when you’re trying to grow or expand a business.
It seemed like everything took a 40% increase when the Euro was adopted, I remember getting bottles of beer at 10p a bottle, 10 for 1 franc
Indeed. It’s only online we have noticed it really. Food in Europe seems to be the same price everywhere, apart from France where is monstrously expensive. Of course in Portugal this causes enormous problems as the average wage here is 25% of Germany. Yes, 25%.
Nice!