The same products sometimes cost more in Austria than in Germany. This accusation, raised several times by the Chamber of Labor, is now confirmed by an analysis by the Oesterreichische Nationalbank. She examined identical supermarket products in the border districts in Tyrol, Salzburg and Upper Austria and in Bavaria. Accordingly, many products cost the same, but if there are differences, then goods in Austria are significantly more expensive.
The price differences between Bavaria and Austria were significantly higher than within the federal states. That was also gilded for the same supermarket chain, where often more was asked for the same product in Austria than in Bavaria. The National Bank assumes that the local cost structure in the Bavarian-Austrian border region is similar. The data also show that differences in the composition of consumption can hardly be of importance for price and inflation differentials.
Consumers could “only benefit from cross-border purchases if they also compare the prices for products”, writes the OeNB. “These high information costs are likely to make cross-border arbitrage unattractive, so that retailers can use common prices to make greater price differences across borders.”
The “border effect” expected by the National Bank could be demonstrated in all active cross-border grocery chains, and it is particularly large for discounters.
From its investigation, the National Bank draws the conclusion “that international price and inflation differentials between similar countries are less a result of different cost structures or consumer preferences than the result of the regional market power of companies and product-specific, cross-border price differentiation”.
The price comparison includes around 20,000 products. Above all, food and beverages, housekeeping products, care products and garden equipment as well as animal feed were recorded. The basis was the systematic data when shopping at the checkout. Districts close to the border in Tyrol, Salzburg and Upper Austria were compared with a total of around. 2.4 million people or neighboring Bavarian regions with a total of around 2.1 million inhabitants.