Rip-off Britain is an expression used by some to refer to the phenomenon in which some products and services cost significantly more in the United Kingdom than in other countries, especially other member states of the European Union and the United States, than a basic currency conversion would permit. The term was coined by the tabloid press in the late 1990s and sees particular usage in mass media when the pound sterling is strong, as this drives down other states' prices in pounds.Origin[edit]
By this point, the phrase had already taken hold in the mass media, and it became a term in frequent use to describe anything that was wrong with Britain.
[citation needed] It also proved to be one of the elements leading to a tipping point in the harmonisation of car prices within the EU.
[citation needed] The campaign was devised by UK
advertising agency Claydon Heeley, who are known for such "
guerrilla marketing" work.
Possible causes
Taxation
The level of indirect
taxation applied to some products such as
alcoholic drinks,
tobacco, and
petroleum may serve to disguise high profit margins by the
retailer, but it may also work in the opposite direction, squeezing profits when there are other legal markets with lower taxation.
In the UK, imported commercial goods valued up to £15 are exempt from VAT; for personal
gifts, the exemption rises to £36. As of July 2014, imports up to the value of £135 are not liable for UK
customs duty.
Business costs
Differences in storage costs are difficult to quantify, since many goods are shipped
just in time directly from the manufacturer to the consumer, or in the case of electronic goods and services, they may not be physically shipped at all, but delivered via the Internet.
Over-regulation
Quality and safety
regulations are roughly comparable between the markets discussed in this article, although some businesses argue that increasing safety regulation increases costs, which must be passed to the
consumer.
[7] Retailers and manufacturers sometimes argue that legal requirements for guarantees and
warranties differ between markets, and this must be factored into prices.
Remedies
Shipping from abroad
Perceived or actual higher prices in the UK often have the effect of encouraging British consumers to order goods from the Internet, whether from UK businesses claiming to break a price
cartel or directly from abroad, including via
eBay and other online auction sites.
Most American Internet retailers ship directly to consumers in the UK which, assuming customs provisions are met, can provide a worthwhile alternative to higher UK prices. Many believe that competition from the Internet and the
Eurozone general
free trade will tend to normalize retail prices and put an end the UK being known as "Treasure Island". However, "customer not present" transactions can generally not be made for legally controlled products such as alcohol, tobacco, solvents, fuels, or medication.
Electrical and electronic products designed for the North American market may have to be converted to run on EU
voltage and
TV systems, annulling any benefit in reduced prices. Other products may also differ in specification, or they may not come with the same warranties or guarantees, making
returning faulty goods difficult, or at least not cost effective. Furthermore, products for sale in the European Union should carry the
CE mark for safety, but products purchased in the United States or designed for the US market are often supplied with other safety designations such as the
UL listing.
Internet delivery
Products and services delivered over the Internet do not face physical barriers for shipping the goods are eliminated, so one might expect Internet-based markets to normalize across free trading countries.
Apple's iTunes Store formerly operated a model in which purchases can only be made in a domain where the users' means of payment is registered. UK customers were therefore tied to the offerings in the UK iTunes Store, proving a disadvantage both in price and selection. On 9 January 2008, however, Apple conceded that this was unfair practice and promised to harmonise prices with Europe within six months, citing
record labels'
wholesale music prices as the reason.