COST OF LIVING ABOUT TO SOAR
Extraordinary series of price hikes in heating, groceries and alcohol
FAMILIES are being advised to brace themselves for autumn price hikes on electricity, gas, groceries and beer.
In recent weeks, eight energy companies have announced autumn price increases – while the ongoing dry weather is likely to force up prices of vegetables, fruit and milk.
Dermott Jewell, of the Consumers’ Association of Ireland, warned that chastened times lie ahead – and said that while every one of the increases would be manageable on its own, this is not the case when they all come at once. ‘If you have more than two or three to cope with then they are not manageable,’ he said.
‘The average consumer, the average family can only spread their money as thinly as possible.’
Customers can expect to suffer a hike in the day-to-day costs of staples such as potatoes, broccoli, cauliflower and cabbage as a result of the ongoing drought, the Irish
Farmers’ Association warned yesterday. It said that it is likely that prices will increase on vegetables or the pack sizes will reduce to reflect the smaller crop yields.
The same can be said for milk as the dairy farmers struggle with the lack of water for their cattle, Irish Creamery Milk Suppliers Association president Pat McCormack said yesterday.
In the beer market, both Diageo and Heineken have written to pubs, wholesalers and off-licences advising them to raise their prices.
The price of Guinness and Smithwick’s, both owned by Diageo, has already increased by 2.3%, or 4c per pint.
Diageo said the move was in line with inflation and that the aim was to continue to make investments in the business.
Heineken is also raising prices by 2.3%.
Other price increases are being attributed to the tariffs on American goods coming into the European Union – introduced as retaliation for President Donald Trump’s tariffs on European goods.
Cranberries, orange juice, peanut butter, rice and sweetcorn now carry a 25% tariff in Europe. However, there will be some products – including footwear, some types of clothing and washing machines – that will carry a 50% tariff.
These extra levies are expected to be passed on to the consumer.
But perhaps most worrying for vulnerable householders with limited income, such as pensioners, are the looming increases on energy bills.
The latest energy company to announce price hikes was PrePayPower, which said it would be increasing its electricity prices by 6.6% and its gas prices by 7.5%, which will cost the average consumer €75.19 and €30.95 a year respectively. In a statement, PrePayPower CEO Cathal Fay said price rises were unavoidable because of hikes in the wholesale cost of gas and electricity.
It follows a series of steep price hikes as global wholesale energy prices soar.
Electric Ireland has announced it will increase residential electricity prices by 6.2% and residential gas prices by 8%. SSE Airtricity said its dual-fuel bills will increase by 8.9%, while its electricity price will rise by 6.4%, and its gas prices will be hiked by 12.3%.
Flogas said its prices will rise 12.8% and Energia said it will increase its electricity and gas prices by 7.6% and 12.38% respectively. Panda Power and Pinergy also announced major price hikes.
The president of the Society of St Vincent de Paul, Kieran Stafford, said this will make things harder on people who are already struggling. He said: ‘This is going to cause real hardship and difficulty to so many people. We would ask the Government to re-look at the fuel allowance scheme.’
Gerard Scully, spokesman for Age Action, said people may not realise it now because of the good weather – but the energy price hikes will be a problem heading into winter. ‘It is a very worrying time for older people,’ he said. ‘There are a lot of people not realising what is coming down the road. People won’t see it in their bills until the autumn or winter, then it will hit them.’
When asked about an increase in the Household Benefits Package to align with the looming bill hikes, the Department of Finance said any increase on this statutory benefit for vulnerable families is a matter for the budget and that it cannot comment.
Meanwhile, the country’s telecoms watchdog has pointed out that network bill prices are also on the rise.
Comreg said Three Ireland’s recent acquisition of rival O2 Ireland has led to higher phone bills here.
‘It’s a matter for the budget’
EVEN though the economy is thriving again, only a few among us have the same sort of disposable income as in the precrash era. The years of austerity have taken their toll in a variety of respects. But we are principally out of pocket due to increased State levies and charges – and, in particular, because of the introduction of the Universal Social Charge.
It is no exaggeration to say that the vast majority of households still need to watch every euro. For that reason, most of us have become experts in shopping around for bargains or, at the very least, something that suits our individual budgets.
Now it emerges that consumers face price hikes across a whole range of groceries, goods and services in the coming months. Granted, it is a grim inevitability that the ongoing drought means fruit and vegetables will become more expensive.
But we are also going to have to pay more for gas, electricity and beer. Of course, this all comes at a time when families are already dealing with the exorbitant cost of sending children back to school.
There is also the prospect of an increase in the price of diesel. Meanwhile, new EU tariffs on imported American goods mean we are all likely to pay more for everything from popcorn to jeans to peanut butter.
It is only a few shorts month until Finance Minister Paschal Donohoe announces his spending plans for next year in Budget 2019. The Irish Daily Mail is firmly of the opinion he must take a prudent approach if the economic recovery is to continue.
Equally, though, it cannot be ignored that the cost of some basic items is going to increase. This is something Mr Donohoe needs to bear strongly in mind as he undertakes his pre-Budget deliberations.
Last year, he gave taxpayers an extra €5 in their weekly pay packets by cutting the USC rate. The reality is that many people, including young families and the elderly, may need more than another fiver to make ends meet when the full impact of these increases is felt.
A rise in the price of gas, electricity or staple foodstuffs always causes strain for consumers. But when all the increases come at the same time, there can only be an extraordinary toll on individual households. Accordingly, Paschal Donohoe needs to remember those referred to by the Taoiseach as the people who ‘pay for everything’.