Tuesday, January 5, 2010

South of the Border

Southern shoppers crossing the border to shop in Northern Ireland are known affectionately by the locals as 'the Mexicans'. That's the northern sense of humour for you (and I think it's funny myself, but that's probably just my roots showing ;-)

But here's the thing: the cross-border shopping panic of 2009 is now history. Even as the CSO was publishing its report showing the value of cross-border shopping rising to €435 million in the year to Q2 2009, deflation in the south coupled with continued inflation in the north was rapidly narrowing what I call the 'justification gap'. In other words, the value of money saved versus the cost of securing the savings is much, much narrower than before. The jump in UK vat rates this month has narrowed the gap further: and the wiser-after-the-event decision to reverse last year's stupid Irish vat increase will help too.

So perhaps now we'll see an end to taxpayer funded campaigns to 'buy (southern) Irish', such a that of the National Diary Council? The evidence elsewhere is that such campaigns are a waste of money (see Anti-Dismal on the very expensive lesson in economic reality that was the Buy Kiwi Campaign). No surprise there.

At the end of the day, it is better to let free trade bring the goods to shoppers rather than have shoppers cross borders to get the goods. Now that Lisbon's out of the way, maybe it's time to re-focus on the Single Market? That'll do more for Ireland's economic welfare than any amount of beggar-thy-neighbour protectionism. Just ask the Mexicans.

4 comments:

  1. Great article! Well stated!!

    ReplyDelete
  2. Great to see gap is closing.

    Disagree re government campaigns though.

    http://en.wikipedia.org/wiki/Got_Milk%3F

    There is plenty more where that came from. Also like the NDC work.POC is a good advocate.

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  3. Cross border shopping is still happening and will continue. Irish Retailers are greedy and won't lower their prices so they deserve to feel the pinch.

    ReplyDelete

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