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Signs of hope for Moville as sterling rises

Posted Wednesday, January 20, 2010

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Moville

Sterling burst through the €1.15 barrier today after previously being at around €1.07.

It's not much considering that it had been in the €1.40 to €1.50 range for a good while before dropping back to around €1.25 and then down further.

However, each rise in sterling gives Moville a chance to recover a little bit more.

Triple Whammy

Moville gets hit by a triple whammy when sterling is low:-

1. People from Derry and the North don't come here to visit and spend money

2. People go from Moville to Derry to shop

3. Many of Moville's people work in Derry and when sterling is weak they have less to spend in Moville.

Disparity

There is still a big disparity in the cost of many items still - especially alcohol, with a bottle of spirits probably double the price here it is in Derry.

The Irish Government cut the tax on beer etc. in the budget by 12%.

However, local pubs have only cut the price by around 10p which is less than 3%.

This is mainly because of the distributors.

Pint Price

The price of a pint of lager has come down from €3.80 to €3.70 and the price of beer and Guinness from €3.70 to €3.60.

That's not going to tempt people from Derry who are paying around £2.20 a pint.

Even with sterling at €1.15 that is still €2.53 in Euros.

If the distributors had been more imaginative and reciprocated the Government's 12% cut and the pubs followed them then that would have taken 12% off of the €3.80 which would have taken nearly 50 cents off and the price would now be €3.32

Getting Nearer

There's still a gap of about 80 cents but if sterling could climb a little futher up to the €1.20 to €1.25 range then the gap would not nearly be so noticeable.

However, sterling is al least going in the right direction.

It is early days but if it climb even more by the summer then Moville might start coming out of recession.