Spain: Affordable Consumer Spending, Telecom Overpriced
SPAIN is one of Europe’s cheapest countries to find clothing, cigarettes, and alcohol, but among the most expensive for mobile phones internet connections, and furniture, according to Eurostat, the EU statistics agency.
The price comparison study of household spending in 2016 for the 28 member states of the European Union set Spain at a figure of 91.5 against an average of 100, meaning the nation qualifies relatively cheap’ alongside the ‘club’ as a whole.
Spain: Mid-Range in EU Consumer Cost Ranking
Overall, Spain is roughly in the middle, with the cheapest country for consumer goods and services being Bulgaria, followed by Romania, Poland, Hungary, Lithuania, the Czech Republic, Croatia, and Slovakia, in that order.
Also cheaper than Spain, in rank order, are Cyprus, Greece, Portugal, and Malta.
Denmark is the most expensive country in the EU-28, followed by Ireland, Sweden, Luxembourg, Finland, and the UK.
Italy comes just above Spain and behind Germany, while the Netherlands, Belgium, France, and Austria in that order are cheaper than the UK.
Spain: Below-Average Consumer Prices 2005-2016 Europe’s cheapest countries
Consumer price evolution is shown from 2005 to 2016 inclusive, and in that time, Spain has always maintained a below-average figure, although in the early part of this period the housing bubble caused prices to rise more quickly.
The highest ranking for Spain was seen in 2011 when comparative prices put the country at 98.5 compared with the 100 average.
Spain is one of Europe’s cheapest countries in unbranded clothing and shoes and the fifth cheapest in the EU – which may come as a surprise in a country with a wealth of home-grown fashion designers and an extensive élite footwear design and manufacturing industry.
Only Latvia, Lithuania, Croatia, Slovenia, and Slovakia are cheaper for buying cigarettes and alcohol, with Spain sitting at 86.1 compared with the 100 EU average.
Consumer protection group FACUA says alcohol and cigarettes generate a very high level of taxes, which make up most of their prices.
Spain is the fifth-cheapest country in Europe for buying all types of vehicles, from cars and vans to motorbikes, mopeds, and even bicycles, at 87.8.
Other produce and services in Spain that fall below the EU average in price are public transport – at just 79.6 compared with the 100 average), housing, either renting or buying, and utilities (at 91.4, food at 95.8), and arts and entertainment (such as cinema and theater) (at 95.4).
But telephone, internet, and postal services are among the most expensive in Europe.
READ MORE: Telecom Expense Services
At 108.8 against the 100 average, Spain is the sixth-most pricey in the EU-28, with only Greece, Ireland, the UK, Belgium and Italy, in that order, paying more for these services.
Spokeswoman for FACTUA Ángeles Castellano says there is ‘nothing specific or special’ about the Spanish telecommunications market that ‘justifies its prices being so high’, something she criticises heavily because ‘nowadays, communications are a basic commodity’.
And the consumer is always in a disadvantaged position compared with suppliers, says Sra Castellano, since ‘you can’t go switching operators every few months’.
“Telecommunications operators in Spain are practically the same ones as everywhere else in Europe – they work as an oligopoly: few companies, lots of power, and very little regulation by authorities,” Castellano says.
Fellow consumer organization OCU agrees.
“The situation is exacerbated by the condensing process seen in the sector, leading to waning competition,” a spokesperson says.
Both groups say ‘prices have traditionally always been high’ for telecommunications in Spain and recall that ‘even Brussels pulled Spain up on this a few years ago’.
This was in 2012, when European Commission vice president Neelie Kroes said: “Spaniards should not have to pay more than everyone else for their mobile phone calls, especially at a time of national economic troubles.”
After a brief spell of lower prices, major network operators in Spain have already put their tariffs up this year, and experts believe they will do so, even more, to compensate for the loss of income now that roaming charges have been scrapped in the EU.
Furniture in Spain is also among the most expensive commodities in Europe, at 102.9 compared with the 100 average, making it even more pricey than in Germany, France, and Portugal.
But Spain has a long tradition of bespoke, hand-crafted, and top-quality furniture, typically sold by independent boutiques, and very little in the way of mass-produced wares in national or international chains; Ikea’s presence in Spain is limited, and cheap high-street chains are few and far between.
Overall, Spain and its consumer prices are at the lower end of the EU, just above the Eastern European nations, and, in the Eurozone, very few cheaper countries can be found.
But the Eurostat report does not take into account household income, salary levels, and financial quality of life, criticising the OCU and FACUA.
“When you measure purchasing power, it’s a very different story – and the study does not bear this in mind,” says the OCU.
“Price levels in a country are partly set by salaries and party by competition conditions; in markets with greater competition, prices are lower, even when salaries are much higher.”
