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Higher taxation and stricter consumer laws are the excuses given by PC manufacturers accused of over-charging UK consumers. These comments come from, among others, Compaq in response to a study by ComputerActive magazine which found UK customers often paid much more for PCs, handheld computers and printers. The ComputerActive investigation highlighted the Compaq Presario 5150 Pentium II. It was 35 per cent more expensive on the UK high street than in equivalent US stores, the article claimed. The US price was around £887 after tax – a massive £312 cheaper than the UK price. A Compaq representative blamed differing taxes, hardware and software specifications, as well as level of services and support provided. She also blamed stricter consumer laws in the UK for bumping up prices. ComputerActive’s findings fuelled the long-running debate that prices are kept at artificially high levels in the UK. Supermarket chain Tesco claimed manufacturers had turned to them last year because they felt existing prices were too high and were deterring consumer spending. Tesco pointed out that many high street retail outlets were now forced to copy its lower prices on PC bundles. A Tesco representative compared computers to other consumer products. "Look at petrol. Since supermarkets started selling it other companies have had to start towing the line. Now the big names advertise petrol at supermarket prices," he said. Pete Day, an analyst at Woking-based research firm INTECO, disagreed that tax and spec differences between the two countries accounted for the huge price variations. He thought US customers paid less due to the different economies of scale - the market is around eight times bigger than the UK, he said. He also pointed out the different workings of the channel, with distribution much tighter in the US. ®

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