Migros CEO calls for tighter restrictions on cross-border shopping
The CEO of Migros has called for the VAT-free limit on cross-border shopping to be lowered to 50 francs per person. Mario Irminger explained that while price differences between supermarkets in Switzerland and its neighbours are narrowing, so-called “shopping tourism” remains a threat to local businesses.
Swiss retailers call for more radical restrictions on shopping tourism
Speaking at an interview with CH Media, Irminger called on the government to tighten restrictions on cross-border shopping. Specifically, he took aim at the amount of goods people bring across the border without having to pay Swiss value-added tax.
As of January 1, 2025, anyone who shops in Germany, Italy, Austria or France is able to bring 150 francs worth of goods to Switzerland without paying local VAT, down from 300 francs per person in 2024. If the total value of the goods exceeds the amount, residents have to pay Swiss VAT - 8,1 percent for most goods, 2,6 percent for food, medicine, period products and media.
Irminger said that while the most recent cut is “a step in the right direction” and “good for the entire retail sector in Switzerland”, he and other supermarkets “would have liked to go further.” He specifically called for the VAT-free limit to be cut once again, to 50 francs per person.
Cross-border shopping costs Swiss businesses billions
In recent years, local supermarkets have suffered significant losses thanks to shoppers taking advantage of the lower prices in Germany and France. This has not been helped by the strength of the Swiss franc, which has made purchasing items in euros all the more lucrative.
As a result, the Swiss Retail Federation estimates that cross-border shopping costs local stores 10 billion francs a year. Irminger noted that while inflation in the EU has led to a narrowing of the price gap, they expect shopping tourism in 2025 to equal levels last seen in 2019. What’s more, a November 2024 study from 20 Minuten found that most (but not all) everyday items remain cheaper in Germany than in Switzerland.
Swiss supermarkets to focus on cutting prices
“For Migros, and the strategy is clear: we are focusing on low prices,” Irminger explained, reaffirming their pledge to cut the price of 1.000 everyday items between October 2024 and the end of 2025. He also recommitted to opening 140 new stores in Switzerland, so that 200.000 more households will have Migros as their nearest grocery store.
Though a 50-franc VAT limit may be popular with local retailers, questions remain about how such a limit could be enforced without infringing on the free movement of people or causing major traffic jams. Indeed, when announcing the 150-franc limit, the Federal Council explained that a 50-franc limit would lead to disproportionate enforcement costs for the police and customs officers and major travel disruption for drivers crossing the border.
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