Dual pricing adopted in shops

I have noticed that many establishments have already adopted a dual-pricing policy in view of the euro changeover, showing prices in both Lm and euros. This in itself is commendable as it gives consumers more time to get used to the new currency.

What is not so commendable perhaps is the trend of using an 'inaccurate' exchange rate. I have noticed this particularly in restaurants. The exchange rate used is 2.5 (or higher) euros for Lm1, when the official euro exchange rate is 2.33. Is this even legal to begin with?

While the difference is not huge (and not as blatant as what happened in Italy, for example) the fact remains that these outlets are effectively using the euro changeover as an excuse to raise their prices.

I'm not sure if there is anything we, as consumers, can do, but it might be an idea to have a list somewhere of all outlets that 'overcharge' in euros... potentially a very long list! (Ian Buhagiar)

I referred this letter to Melvyn Mangion of the National Euro Changeover Committee (NECC) and here follows his reply to Mr Buhagiar's query:

Thank you for taking the time and e-mailing us with your complaints/queries. Currently any retailer displaying prices of goods or services in Maltese liri and euro is doing so at his/her discretion.

The NECC issued guidelines in this respect on the Optional Dual Display of Prices (NECC/001/06). The euro is a foreign currency and therefore retailers incur additional charges when they deposit euros at the bank.

The Optional Dual Display Guidelines state that the price displayed in euro should be that converted at the Central Parity Rate of 0.4293. This is done for information purposes only.

However, the retailer must inform the consumer in writing that any purchase carried out in euro may be subject to an additional charge associated with the exchange rate of the euro currency to the Maltese lira.

May I kindly ask you to send us any receipts, which you might have, that display the incorrect exchange rate, so that the NECC will contact the outlets concerned and draw attention to the fact that the conversion rate used is inaccurate.

Voluntary dual display of prices is being promoted as of early next year. Outlets that intend displaying prices in both currencies on a voluntary basis are obliged to participate in the FAIR initiative, which seeks to guarantee fairness and transparency throughout this period.

The Dual Display guidelines issued by the NECC (NECC/05/06) apply to all retailers taking part in the FAIR initiative. Mandatory dual display of prices will commence in July 2007 and will end in June 2008.

These guidelines also apply. The euro observatory, which has been set up and falls under the Ministry of Finance, will seek to ensure price stability during the euro changeover and will also be responsible for the ongoing management of the FAIR initiative.

I trust this answers your query. Thank you for showing interest in the euro changeover process. (Melvyn Mangion, manager, Public & Media Relations, NECC)

I thank Mr Mangion for his constant co-operation. With a particular focus on the exchange rate used, as reported by Massimo Farrugia in The Times on November 20: "The NECC has issued warning letters to more than 50 outlets that were displaying prices in euros and liri based on an incorrect exchange rate.

"As the official voluntary dual display date - January, 2007 - approaches, an increasing number of retailers have started displaying prices in both currencies on receipts, menus and shelves. Simultaneously, more consumers have been watchful that the conversion is being made at the central parity rate of €1: Lm0.4293.

"A spokesman for the NECC confirmed yesterday that, since September, consumers had reported 51 outlets, mostly bars and restaurants, that had used a different rate to convert prices to the euro, with five of them having been sent a second letter.

"Warnings against the use of a wrong exchange rate have come from NECC chairman Joseph F.X. Zahra, who on several occasions has called for a fair and transparent dual display of prices.

"The NECC has stressed the importance of the consumer as the best watchdog to ensure that the adoption of the euro is transparent and fair. Consumers can submit reports on Freephone 154."