This article was first published on 365 club.ch
Residents of Switzerland have long grumbled about the nation’s high prices compared to neighbouring countries. On 19 March 2021, the government moved a step closer to removing two of the competitive barriers inflating Swiss prices.
There are many factors behind Switzerland’s high prices. Chief among them are exclusive import arrangements that allow foreign brand owners to force higher prices on to Switzerland’s consumers and geo-filtering on the internet.
How it works
Foreign brand owners strike exclusive deals with a single wholesale importer and force all retailers in Switzerland to buy from that single source at a price fixed by the brand owner and the importer. Swiss retailers sometimes try to get around this by sourcing the same products more cheaply from sources, for example, a foreign wholesaler. However, current laws allow brand owners to go after any retailer doing this. As a result, few do, and Swiss prices remain elevated.
Geo-filtering is a practice that involves identifying Swiss-based internet users and redirecting them to a Swiss site with higher prices.
On 19 March 2021, Switzerland’s parliament, which includes the National Council and the Council of States, voted in favour of changing two key laws after being spurred into action by a planned referendum on the subject, which has been withdrawn now that the government has acted.
Exclusive import deals deemed anti-competitive
Going forward, anyone in Switzerland forced to buy from an exclusive wholesaler at elevated prices will be able to lodge a complaint with the competition commission.
In addition, the practice of price discrimination via geo-filtering will be banned. For example, anyone who rents a car online in France or Italy, reserves a holiday apartment or buys a ticket to an event outside Switzerland must be offered the same price as they would get if they were already abroad.