Minister urges action on below-cost selling

An Irish minister is urging the government to ban below-cost sales of alcohol as new figures show the taxpayer is subsidising €21 million each year through lost VAT and excise duty.

Minister urges government to ban below-cost sales of alcohol

Minister for Children James Reilly said underage and below-cost sales of alcohol “must be addressed” because retailers have been reclaiming VAT for losses on products they decide to sell below cost.

The National Off-Licence Association estimates the exchequer loss at €21 million a year based on the volume of alcohol sales, the Irish Times reported.

Last week, backbencher and Fine Gael TD Michael Creed claimed the exchequer was being “raped” of €21 million every year by below-cost alcohol sales.

He explained if a supermarket buys a bottle of alcohol for €1 and sells it for 50 cent, the retailer only pays excise and VAT on the 50 cent, but said it was main supermarket stores benefitting, not small off-licences.

“This is an absurd taxpayer subsidy to the drinks industry,” he added.

He continued to describe government policy on below-cost alcohol sales as “shambolic” and said his colleagues in Cabinet were “abdicating responsibility” by waiting for an EU Commission ruling on the matter.

However, a spokesman for Minister for Enterprise Richard Bruton said it was up to retailers to decide how much to charge customers for alcohol.

Earlier this year, research claimed UK supermarkets were subsidising cheaper products and shifting more tax hikes onto more expensive products.