Reducing variation of prices for the same product in different places


  • Narrowing price differences between countries

Implementation

In the end of the 1990s price differences, inclusive of VAT, sharply narrowed between the European Union member countries as a result of the impact of the European single market, where goods were allowed to move freely. The EU's southern member states - Portugal, Greece, Spain and Italy - remained the least expensive, the Nordic countries - Denmark, Sweden and Finland - the most expensive, along with Austria. Even so, Danish prices were 75% higher than Portuguese on average, taking purchasing power into account. Price differences were at their narrowest in the case of clothing, with prices in the most expensive country just 30% higher than in the least expensive. Danish prices for furniture, television, hi-fi equipment, sports goods, toys, footwear and electrical appliances were less than one and a half times higher than in Portugal. There were greater price differences for confectionery, fish and books and magazines. But prices in the most expensive country were twice as high as in the least expensive in the case of cosmetics, stationery, jewellery, travel goods, cars, motorbikes, bicycles, fruit and vegetables, bread and cereals, and household linen. The differences were even greater when it came to meat, and up to two and a half time greater in the case of non-alcoholic beverages and tobacco products. And alcoholic beverages were in a league by themselves in Denmark.


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