Profit-taking rife in clothes irons

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Profit-taking rife in clothes irons

Local consumers pay over 2.5 times the import price for electronic clothes irons shipped from other countries, the Korea Consumer Agency revealed yesterday. The body said in its report that the average cost of importing irons is 36,600 won ($31), against a median retail cost of 92,430 won at major department stores and large supermarkets.

The agency checked the prices paid by importers and distributors of 41 foreign-made electronic flat irons and said that they took a maximum profit margin of 150 percent. As French-made Tefal, German-made Rowenta and Dutch-made Philips are each imported by one distributor, oligopolies in the local market have limited price drops in the wake of the implementation last summer of Korea’s free trade agreement with the European Union.

After the trade pact took effect in July, the average retail price of irons shipped from the EU fell 15.1 percent on average, but they still grew 5.1 percent overall as irons manufactured in other countries accelerated in price.

“High profit-taking from local importers and distributors has prevented consumers from enjoying cheaper imported goods,” said Bae Seung-heon, an official at the KCA’s market watch division.

Large supermarkets and electronics shops may be even more culpable as they have simpler distribution systems than department stores yet keep the same prices, the report showed.?

“This only means that there is still room for prices to be lowered,” said Bae.

The first two groups buy products directly from importers and account for about 80 percent of all electronic clothes iron sales, as consumers assume they will be cheaper. Department stores go through middlemen, adding to their outlays.

By Lee Sun-min []

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