DUBLIN, Feb 1 (Reuters) - The Irish government will introduce price controls if retailers supplying products from Britain do not cut their prices to reflect the sharp drop in sterling, the deputy prime minister said on Sunday.
'If we do not see the passing on (of the currency differential) then, as I have indicated quite categorically, we will have to introduce legislation,' Mary Coughlan told state broadcaster RTE.
Thousands of Irish shoppers have flocked across the border to British-ruled Northern Ireland as the euro has gained more than 10 percent against sterling in the last three months.
Some British chains and shops selling products from the UK in the Republic of Ireland have cut their prices to reflect the currency differential but not all.
Irish retailers have said that British wholesalers have not been passing on sterling discounts to them.
Before sterling started to fall against the euro, consumer prices in Ireland were the second-highest in the European Union in 2007 due to high input costs and a lack of competition, the central bank has said.
The high cost of living and of doing business in Ireland has already prompted some foreign companies, such as Dell , the world's No. 2 PC maker, to shift some of their operations to cheaper destinations such as Poland.
But with falling interest rates, a drop in the price of oil and weak consumer demand due to a deepening recession, consumer prices are expected to fall this year with the central bank this week forecasting a 1.9 percent drop in 2009.
(Reporting by Carmel Crimins; Editing by Steve Orlofsky) Keywords: IRELAND PRICES/ (carmel.crimmins@reuters.com; Reuters Messaging: carmel.crimmins.reuters.com@reuters.net; + 353 1 500 1529) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'If we do not see the passing on (of the currency differential) then, as I have indicated quite categorically, we will have to introduce legislation,' Mary Coughlan told state broadcaster RTE.
Thousands of Irish shoppers have flocked across the border to British-ruled Northern Ireland as the euro has gained more than 10 percent against sterling in the last three months.
Some British chains and shops selling products from the UK in the Republic of Ireland have cut their prices to reflect the currency differential but not all.
Irish retailers have said that British wholesalers have not been passing on sterling discounts to them.
Before sterling started to fall against the euro, consumer prices in Ireland were the second-highest in the European Union in 2007 due to high input costs and a lack of competition, the central bank has said.
The high cost of living and of doing business in Ireland has already prompted some foreign companies, such as Dell , the world's No. 2 PC maker, to shift some of their operations to cheaper destinations such as Poland.
But with falling interest rates, a drop in the price of oil and weak consumer demand due to a deepening recession, consumer prices are expected to fall this year with the central bank this week forecasting a 1.9 percent drop in 2009.
(Reporting by Carmel Crimins; Editing by Steve Orlofsky) Keywords: IRELAND PRICES/ (carmel.crimmins@reuters.com; Reuters Messaging: carmel.crimmins.reuters.com@reuters.net; + 353 1 500 1529) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.