Rip off Britain
May 31, 2007, 12:21 pm
Filed under: adobe, apple, microsoft, rant, Rip off Britain, software, uk, warcraft, wow

Jon and I were lighting our cigars with £50 notes the other day when he cared to mention the cost of new fangled computer software. I took a sip of my champers from the crystal champagne flute, and mused on the idea as Jon continued. “We British types pay up to £750 more for Adobe’s latest wizzer drawing suite than our American chums across the pond”, he chirped.

“Crivens!” I exclaimed, and challenged him on his accusation.

Ok, so I’ve never had a £50 note and considering both Jon & I are from an old cotton town in Lancashire, I doubt either of us has ever said “Crivens!” and we definatly don’t drink champagne from crystal flutes, they’re Sterling Silver.

He’s right about Adobe’s CS3 Premier though, on Adobe’s site, the US version is listed as $1799, yet on the same site it’s listed as being £1655.58. At current exchange rates, the US version is £904.98, that’s a difference of £750.60!! Why on earth is it so much more expensive in the UK? This is for the download version too, not the boxed retail version.

It doesn’t stop there either, lets take a look at Microsoft Vista. There are currently 4 versions of Vista available, Basic, Premium, Business and Ultimate. In the US (from Microsoft’s online store) they cost $99.95, $159.00, $199.00 and $259.00 respectively, which at a straight $ -> £ conversion is £49.00, £79.99, £100.12 and £130.31.

In the UK (from Ebuyer, the Microsoft store isn’t available in the UK) Basic is £158.99, Premium is £186.35, Business is £227.36 and Ultimate is £311.13. That’s an average of 60% more the Vista users have to pay in the UK, what do Microsoft have to say? Well their spokesman gave me this statement,

Customers can buy Microsoft products in person from the US or any other country. However in common with other businesses across many industries UK-based customers will be re-directed from websites abroad to UK websites.

With regards to price differentials between the US and the UK, Microsoft operates in a global economy and pricing for its products does vary by region. Various local factors affect the pricing of many goods, including Microsoft software in UK Shops. Some of these factors include;
* The cost of doing business in the UK is more expensive than in the US (Buildings, rent, people, fuel, and travel)
* VAT is always included in the UK retail price. The price consumers pay in shops includes this 17.5 % as opposed to an average US sales tax of around 6%
* The exchange rate has moved significantly over the past 6 months, but to provide consistency to Partners and Business we do not make constant changes to trade prices. However we do review the exchange rate regularly
* In-store prices are set by retailers. The retail channel in the UK does not benefit from the same economies of scale as the US and is also less efficient. It is worth noting that a broad range of retail goods tend to be more expensive in the UK than in the US.

We continue to monitor these factors closely and always strive to offer our consumers the best prices and value possible.

Ok, so what does that tell us? It accounts for 17.5% of the higher price because of VAT, I’ll give them that, but are British workers really paid that much more than their US cousins? The echange rate excuse is nonsense too, other companies seem to manage ok (as we’ll see in a moment.)

I also appreciate that other products are more expensive in the UK, not just Vista, but I did point out in my email that I wasn’t just looking at Vista.

I also wrote to Apple who, even before they corrected my maths, were significantly better priced than the two companies above, OSX works out at just 7% more expensive in the UK, and World of Warcraft is actually CHEAPER to play in the UK than the US.

How can Apple & Blizzard survive doing business in the UK when they aren’t recouperating the 60% higher costs of doing business in the UK?

It seems I’m not the only one who agrees that Adobe’s prices are too high in the UK, Nigel Moore has also written on the subject, and he even seems to have a response from Adobe, looks strangely familiar though.

Danielle Libine has written an article, started a petition and written to the EU asking them to investigate too, but I’m guessing Brussells will take even longer to reply than Adobe.


1 Comment so far
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I’ve read about people flying over to new york for shopping trips – I wonder how long it’ll be before people start doing that for software

Comment by jonH (the old one)

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