Aussies pay more for too many goods - please explain

Digital age challenges retailers to give better choice, prices and service.

In its submission today to the Productivity Commission’s retail inquiry, CHOICE says the pricing disparities between many goods sold in Australian stores and those purchased online from overseas are significant and often economically unjustifiable.

For example, the cost of the top 12 music albums recently cost, on average, 73% more on the Australian iTunes store than the US iTunes store. The price for popular video game Portal 2 for Xbox 360 and PlayStation 3 cost 91% more from a major Australian online retailer than from an overseas online website based in Asia.

A pair of Nike running shoes cost $240 at a major Australian sports retailer while the same product could be bought for $134 from an online sports store based in the US.

“There are too many examples from white goods to motorcycles and TV’s to video games where we pay more. It’s up to those in the supply chain here in Australia to justify why this is the case. Importers and retailers should not cry foul if consumers chase better prices, wherever they may be,” says CHOICE director of campaigns and communications, Christopher Zinn.

CHOICE says it sees no justification in changing the present GST-free threshold of $1000 for online shoppers so that Australia retailers are protected from overseas online retail competition.

The consumer group says the benefits of overseas offerings, including better prices, service and range; outweigh any disincentive a ten percent levy may create. CHOICE says it is a pipe dream for local retailers to think the imposition of a GST on overseas purchases will suddenly make the threat go away.

“The pressure from overseas online competition is a much needed wake up for Australian retailers to be more competitive. We need to move beyond a complacent culture of high prices, high margins and poor service,” says Mr Zinn.

Even though parallel importing is legal for most products, CHOICE says companies can use technological methods such as banning international IP addresses and credit card numbers as well as pushing consumers to ‘local’ websites. This creates barriers for consumers wanting cheaper items over the internet.

“We are challenging global corporations to drop the artificial technological barriers used to block competitive prices online, such as those affecting software and music downloads,” says Mr Zinn.

“There is no reason why Australians should pay more than consumers in comparable countries for digitally delivered items like software.”

To read the full submission by CHOICE to the Productivity Commission’s retail inquiry, go to www.choice.com.au/retailsubmission

Media contact:
• Christopher Zinn: CHOICE campaigns & Communications Director: 0425 296 442
• Ingrid Just: CHOICE, Head of Media and Spokesperson: 0430 172 662