VFI claims “irrefutable evidence” of below-cost selling

“The State is subsidising the cost of this alcohol in its VAT transactions.” – VFI Chief Executive Padraig Cribben.
“The State is subsidising the cost of this alcohol in its VAT transactions.” – VFI Chief Executive Padraig Cribben.

The VFI has produced “irrefutable evidence” that supermarkets are selling alcohol below-cost and at the expense of essential grocery products.

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31 March 2014

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By keeping record of annual price comparisons it has found that for St Patrick’s Day in 2005 a ‘slab’ of Guinness was advertised and sold for €39.97 which equates to €1.67 per unit price. Not only that, but it was marketed as “Cost Price”, the Federation stated.

For St Patrick’s Day 2014 an eight pack of Guinness was advertised at €11 which works out at €1.38 per unit and €33 for a slab of 24 representing a price decrease of 17.4% on the 2005 price.

“All of this in spite of the increases in both VAT and excise over this nine year period,” stated the VFI’s Chief Executive Padraig Cribben.
 
“Even more concerning is the reduction in the price of spirits,” he continued, “A 70cl bottle of vodka in 2005 cost €20.80 on St Patrick’s Day promotion, again marketed at ‘Cost Price’. Nine years later, in 2014, a 70cl bottle of vodka was advertised at €18.20. All of this was facilitated by the abolition of the Groceries Order.”

He pointed out that if these prices are taken with the recent analysis on branded essential grocery products, “It’s abundantly clear that these staple products are being increased to compensate for the cheap alcohol. This is hardly acceptable when so many families are struggling to cater for the essentials. It is certainly not consumer-friendly.
 
“For too long Government have been talking about what they’re going to do. In October 2013, codes of practice and legislation were announced. Six months later nothing visible has happened – not exactly a priority. There also has been a major loss of VAT to the Exchequer as a result of this practice as significantly lower VAT is being collected. In fact the State is subsidising the cost of this alcohol in its VAT transactions.
 
“The time for idle words is over. Action is now needed to actually protect the consumer,” he concluded.

 

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