We recently sat down with Stefan Meierhans, Switzerland’s official price watchdog, and asked him questions on your behalf.
A few weeks ago we invited readers to suggest questions we could pose to Meierhans about the cost of living in Switzerland. Here’s what he said.
swissinfo.ch: If somebody with a half-fare card is caught without a ticket, shouldn’t the fine be half-price?
Stefan Meierhans: Ha! That’s a very good question. I’ve never thought of this. You basically have a valid ticket on 50% of the fare. But usually the concept of fines doesn’t work that way. One might give it a thought. Fifty percent off might be a bit too much since the goal of a fine is that people don’t do it again. I’m going to think about it.
Why is coffee so expensive – especially during special events like WEF and Baselworld?
At the World Economic Forum in Davos, a coffee cost more than CHF6 ($6.30) and the fees for hotels went up, too. The prices usually go up when something gets rare and there’s a high demand. That’s the typical mechanism of a free market, and it has to do with what people are ready to pay.
But why is the normal price for coffee between CHF3.5 and CHF5? In Ticino in southern Switzerland, you rarely pay more than CHF3.
It’s true, culturally I always like taking an espresso in Ticino. Usually you stand at the bar. It’s very efficient and less time-consuming, so does this result in a lower price? In German-speaking Switzerland you usually sit down at the table, somebody comes to you, waits on you, brings the coffee and clears the cup – and this is a personnel cost. In a Ticino coffee bar there’s one person doing everything, whereas in a Swiss-German restaurant there are perhaps three people working. And this makes it more expensive.
In my office here the coffee costs CHF0.90. Nowadays, you can get coffee at a bar or in a convenience store, and usually it costs less than in a restaurant. So you get what you pay for; if you want to sit down in nice surroundings, and maybe charge a smartphone while you’re drinking a coffee, that all adds up.
Why does a SIM card cost CHF40 in CH?
Good question. The price isn’t just for the SIM card itself. You’re paying for the work of the administration and registration of the data behind it. By law, all the telecom firms have to maintain that. When you change from one phone company to another, the administration is being covered by those 40 francs.
On the other hand, I do agree – and we’ve been thinking about looking into this more closely – that fee hasn’t changed in years and years. The initial investment has probably been paid for by now, and I’m thinking about looking into whether the price for SIM cards is in fact too high.
What do you think about the development of prices for household and pantry basics over the past decade?
It should be a topic, and it should stay on top of the agenda. We still have a big disparity on pricing. Take cosmetics, for example, in Switzerland compared to neighbouring countries. And other goods imported here. We have systemic problems, especially because we usually have general importers who have the import monopoly for certain things. We don’t see the rise of the franc having enough impact on the price of those goods, especially when they’re internationally well-known and sold in other countries for much lower prices.
There has been some movement on the political level. The Swiss citizens will vote in some months or years on the Fair Price initiative, which tries to change the law. Previously, there was talk of revising the Swiss competition law, but unfortunately, it wasn’t successful in parliament. The revision of the cartel law was turned down. So this initiative is basically another attempt to get better and more efficient competition conditions. We have to change the criteria when competition is being hindered and pursue those who try to isolate Switzerland and get more money from the consumers just because they happen to live in Switzerland.
How affordable is Switzerland for the low-income bracket?
Every situation is different, but what is true is that for the past five years we’ve had a decrease in general pricing – both on domestic and imported goods. We’ve had quite a significant decrease on imported goods because the Swiss franc got so strong compared to the euro and the US dollar. So imports have become cheaper, also on the shelves.
What I hear from citizens is that the compulsory spending is mostly a problem. That’s rent, health insurance, other insurance, and to a certain extent for the middle class, taxes.
What can be done about the high rents in Switzerland?
By law I don’t have any competence on that, unfortunately. It would be interesting. But the problem, basically, is that the market works, in my opinion, in that sense that there is high demand, and this gets the prices up. Of course this doesn’t help the people in need. I see now that some cities, like Bern, have decided that the public should invest in more affordable housing. It’s a big topic in Geneva, as well. I think it’s a problem that needs to be solved by politics, and not by interference in the market. I think the offer of better affordable housing should also come from the state or the government.
And health insurance?
Experts say 20% of the CHF34 billion we spend a year on healthcare is not necessary. So that’s CHF6 billion in overspending on medication and therapies, and too high prices for generics and hospitals.
Last year I was a member of an expert commission tasked with looking into the revision of healthcare. We put 38 proposals on the table. The government is going to decide this spring on how and which of those measures are to be followed and in which space, and I think on the political side they’ve seen that there’s a problem and I hope that at least we can at least not have any more substantial increase in that spending. Perhaps it’s not going to go down, but at least it shouldn’t increase as much as it has in the past.
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