Competition hits the isle of high prices: despite the many bilateral treaties between Switzerland and the EU, this country remains an island of high prices. Even if the expensive Euro has dulled the sharpest edges that gouge us, Swiss consumers continue to pay up to double their EU neighbours. Swiss News investigates why.

AuteurHeddema, Renske

As an expat in Switzerland, you've probably been there; at a party, somebody brings up the high prices in Switzerland. How can it be that there is so little variety for such shocking prices? Another guest weighs in that she finds a strangely unapologetic attitude when she has to return something, with the shopkeeper taking down all sorts of personal information as if trying to lay blame, she says.

And the astute consumer who crosses the street from the supermarket to the small grocery store may have nabbed the best buy in both stores, says another, but the piercing look from the cashier in the small shop is a killer. They conclude that Switzerland is a country where the vendor, and not the customer, is in charge.

Shopkeepers in charge

US citizens, the purest defenders of free enterprise and customer rights, stand aghast at this curious balance of power, though the Swiss themselves do not seem to be bothered.

Here customers stay loyal to their shopkeepers no matter what. Buying Swiss products from familiar Swiss businesses is a habit that has survived in modern urban society. The Swiss continue to act as if they depend on the only store in the valley.

Why is it that the laws of competition, and supply and demand, seem to have so little impact in Switzerland? The foremost impediment is the structure of the Swiss internal market, in which the frontiers between the cantons form solid barriers against a free exchange of goods, services and people.

Neighbouring cantons do not recognise one another's school systems. Vocational training has only regional value. As a result, rarely can students who obtain a diploma in one canton, move to another.

The alumnus of a teacher-training course in Canton Zurich will not be recognised in a classroom of Canton Zug.

Only when there is shortage of a certain kind of professional will an exception be made. The world of construction follows the same pattern. A call for bids on potential projects is a cantonal matter. Builders from other cantons simply don't have a chance, presuming they can take part in the bid at all.

Call it cartel, agreement, or tradition, there is an underlying system in place, which not only keeps the internal market firmly regulated but also keeps foreign imports at a distance.

Fruits of competition

Slowly but surely the system has begun to change. Canton Aargau opened up its borders to competition from other regions and prompted strong words of support from the federal government for doing...

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