The Benefits of Banal Headlines (3)

6/3/2011 10:41 AM
Category: Opinion

"Cinema Sales Set 18 Records Last Year" read a recent headline in the Estonian press. "No duh," you probably muttered to yourself, as you decided not to read the article. "It's because market competition finally made the ticket prices reasonable."

How expensive everything is in Estonia is a favorite topic for both foreigners and locals. My girlfriend says that buying makeup in the center of London is cheaper than buying it in Estonia. Last week she went to get a 10-centimeter split on her dress repaired, and they charged six euros. She asked if that wasn't a bit much and they said no, they'd rounded the number for the euro changeover. Before it was 75 kroons; now it's almost 100. They obviously rounded up. Way up. "The government said the euro wouldn't cause prices to rise," my girlfriend said angrily over dinner. "Maybe Andrus Ansip's wife doesn't notice, but the rest of us do."

It's not just chick stuff that's more expensive. It seems almost nobody buys electronics here, and I have a friend who makes good money importing (smuggling?) it in small quantities. Furniture is cheaper if you drive to Finland's IKEA and bring it back yourself. Shopping still sucks in Tallinn, unless you're wanting cheap booze and cigarettes.

Favored theories behind the higher prices are many: quantities of goods imported are too small to permit world-market prices; we live in northern Europe where everything is expensive; cartels run everything; Estonian retailers are extra greedy. 

Personally, I think Juhan Parts got it right in an interview several years ago, where he concluded something to the effect that he didn't see a cartel problem, but there just wasn't yet much real competition in Estonia. 

Luckily, that's starting to change. Thanks to Solaris coming to town, cinema tickets are now affordable - even better than in major cities. Perhaps thanks to Bauhaus entering the market, it seems like every week I get a price circular from Bauhof in my mailbox. And food and beverage prices in restaurants have certainly come down, unless you're one to dine in the tourist traps of Old Town.

To be sure, merchants are exploiters - any economics text will tell you that. And it's probably worse in Estonia, since a 20-year-young economy may not be enough to teach businessmen that long-term relationships with consumers actually matter. In too many cases there's still the fleece-'em-once-and-move-on mentality.

But if there's one benefit to a rather banal headline about cinema traffic, perhaps it's that it might serve to remind merchants that lower prices, even in a small market, can indeed mean better volume. But don't tell that to my girlfriend. The next time her dress needs to be fixed she says she's going to do it with duct tape.

 

George von Gernet


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