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Dáil
‹ Ceisteanna — Questions Oral Answers - Consumer Price Index.

Price war effects on CPI

Summary

Horgan questioned whether supermarket price-war discounts would distort the CPI and proposed excluding under-cost selling in future surveys. Moore said the CSO records prices actually paid on pricing days, including sales, and changing the method would invalidate the series; the CSO considers it the best approach.

asked the Taoiseach if he will take steps to ensure that the price-checking due to be carried out on 17 February, in connection with the compilation of the CPI, is organised in such a way that the data on prices will not be distorted by the temporary effect of the supermarket price war.

Comment on this
Seán Moore Minister of State at the Department of the Taoiseach (Mr. Moore) Fianna Fáil

The consumer price index is compiled by the Central Statistics Office. The prices collected for the compilation of the index are those which are actually paid by consumers on the relevant pricing days and a change in this procedure on the present occasion would invalidate the series.

Comment on this

Would the Minister confirm that yesterday, Tuesday, 17 February, was one of the pricing days involved?

Comment on this

That is right.

Comment on this

Would the Minister not agree that the existence of a price war at the moment will distort the consumer price index because by the time the CPI is published the victors and the vanquished in this price war may have been settled and prices may be back to the level they were before?

Comment on this

The Deputy should remember that special sales are going on in the stores all the time. Special offers and sale prices are taken if they are offered on that pricing day. It is going on all the time. The stores are offering special sales reductions.

Comment on this

Would the Minister not agree that there will be many shoppers who do not have access to shops which are involved in the price war and they will be paying substantially more than the prices which may be recorded in the price survey?

Comment on this

One has got to review the whole situation. We are very determined to show the situation as it is and not as we would wish it to be. Any change would invalidate the whole series. This is done because of experience. We are showing the picture as it really is. If what the Deputy suggests was done, it would distort the whole picture.

Comment on this

While there are sales on all the time, is the Minister now suggesting that there is under-cost selling going on all the time? That is what the price war is about. You will get distortion from that. Is the Minister implying that this is always the case, that under-cost selling is a feature of sales and bargains which are offered in the shops?

Comment on this

I am not saying that. I am saying that all the time we have got those special offers and sale prices and they are taken if they are offered on that pricing day. There is no other way of doing it.

Comment on this

Would the Minister not accept that the way to do it might be to ask the Director of the CSO to investigate the possibility in future surveys of instructing the inspectors to disregard undercost selling for the purpose of compiling the CPI?

Comment on this

I am sure the Deputy shares with me the desire that we have the best possible way of assessing the index. The CSO assure me that this is the best way of doing it.

Comment on this