Why is it always short-term thinking?!?!

meglome

http://www.independent.ie/national-news/vat-cut-could-be-pulled-if-shops-donrsquot-pass-it-on-2814836.html

VAT cut could be pulled if shops don’t pass it on
National News Home

By Independent.ie reporters

Wednesday July 06 2011

The Government has threatened to pull the recent VAT reduction unless shop owners pass it on to customers immediately.

Household names like coffee firms Insomnia and Butler’s Café, are not passing on the cut, according to a survey by broadcaster Newstalk.

The reduction from 13.5pc to 9pc is designed to boost the retail and tourist industries and create jobs.

Junior Minister for Tourism, Michael Ring, said he was disappointed that many shop owners were not passing on the cut.

"I want to say to the people who are not passing it on: you might have short-term gain but it may have long-term effects on your business," he said.

"We are giving you the opportunity,” he added.

“We brought in a stimulus budget a few weeks ago - we also have an opportunity again very shortly if we find this is not being passed on, there will be a budget again in December and this Government can bring the VAT rate up to 13.5pc again."

Shop owners are not obliged to pass on the cut and many have said they are already suffering high business costs and the affects of the recession.

- Independent.ie reporters

Not that it comes as a surprise to me but it looks like the majority of places are not passing on the VAT reduction. Someone we work with works with pubs and (without going into details) he's been asked to alter listed prices for 3 out of 130. This is an excellent opportunity for places especially pubs to show some commitment to their customers by lowering prices without it actually costing them anything. As a businessman myself this just seems like very bad business.

I'd personally be much more likely to use a place if I see they've passed these savings along.

nesf

Standard shortsighted crap as per usual. In a penny pinching recession it's really a bad idea not to lower prices when you can do so without it costing you a penny.

meglome

meglome wrote: »

I was at a wedding two weeks ago in Faithlegge in Waterford. The 'special' rate for the wedding guests was €160 for the night. The rate that you could get outside of the wedding was €80. I wasn't going to stay but decided on the day to do so. There was no way the rooms were worth 160, fairly poky and average imo. I told them point blank I could get a room in the city for less than €100 so there was no way I was paying €160. After some unfriendly (on their part) haggling I paid €120. But honestly it was almost like I insulted someone's mother, such was the attitude. I appreciate that many hotels are hurting financially but trying to gouge me (imo) for the room means I would never ever go back and I would tell others to not touch the place with a barge pole.

Worse I've been at 3 weddings in the last year and the same thing was being done. As it stands I'd have to be forced at gunpoint to go back to those hotels.

From another thread. This is another industry here that has the same problem.

Should the government be forcing businesses to drop the prices based on the vat reduction?

I was talking to someone else and when they asked in a pub why the prices hadn't gone down they were told that the prices there just about to be raised so it all balanced out. Do they think people believe that rubbish?

mikemac

It's going to be put back up within a year I reckon if the consumer sees no benefit

Charlie McCreevy did this when 1% was taken off VAT

There is a large thread over in the Wedding forum about this.
The Irish Hotel Federation asked its members to pass it on, some do and some don't. But you need to insist, if you don't ask you don't get I suppose
Some couples with bookings and deposits paid plan to pay the bill with the lower rate and tell the hotel to chase them if they want the rest.
No hotel would take you to court, they'd lose and it's very bad publicity

dsmythy

It's up to people to find out who has and has not passed it on. Best way to make the higher pricers suffer is with feet.

anymore

I know a person in the retail trade who siad that in thier opinion that Irish pubs started going into real decline after the public saw publicans charging for entrance on New years Eve, Millenium Night. It might be like that with premises who dont reduce their Vat.

anymore

meglome wrote: »

From another thread. This is another industry here that has the same problem.

Should the government be forcing businesses to drop the prices based on the vat reduction?

I was talking to someone else and when they asked in a pub why the prices hadn't gone down they were told that the prices there just about to be raised so it all balanced out. Do they think people believe that rubbish?

I didnt realise for years that I could get much better value abroad and better quality for the same money I was paying in Ireland so now I am voting with my feet. thank God for cheap Aer Lingus and Ryanair flights !

Godge

Believe McDonalds have cut their prices. Happy meal gone to 3.80.

Must check if there is a thread in the consumer forum listing those who did/didn't.

mikemac

Insomnia coffee chain have not passed on the cut and are quite open about it.

I know it's tough to run a business but the markup on the ingredients for coffee, tea and pastries and what you can sell them for is incredible.

I thought they would have been the first, clearly I was wrong

meglome

mikemac wrote: »

Insomnia coffee chain have not passed on the cut and are quite open about it.

I know it's tough to run a business but the markup on the ingredients for coffee, tea and pastries and what you can sell them for is incredible.

I thought they would have been the first, clearly I was wrong

Well again it makes me wonder should these drops in VAT be forced on companies. Though goes without saying that people should not go into shops that don't pass it along.

meglome

anymore wrote: »

I didnt realise for years that I could get much better value abroad and better quality for the same money I was paying in Ireland so now I am voting with my feet. thank God for cheap Aer Lingus and Ryanair flights !

I'm sure many of us just buy over the internet. I'm willing to pay more for going into a shop for something but not some of the prices we see in Ireland.

Icepick

supply/demand
vote with your wallet
QED