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VFI Calls on Government to Examine Below Cost Selling of Alcohol in Supermarkets

29-June-2010

The Vintners’ Federation of Ireland (“VFI”) today called on the Government to look at the pricing strategies/policies of supermarkets in Ireland.

Following the publication of the latest Eurostat figures, CEO of the VFI, Padraig Cribben warned that, “There is a strong argument to be made that these latest Eurostat figures support what we and organisations like us have been saying for some time, that supermarkets are increasing the price of staple food products like bread, milk and meat to allow them sell alcohol below cost as a loss leading marketing strategy.

While supermarkets in the UK have admitted engaging in such practices in the past supermarkets here have stayed silent on the issue. The evidence is now before us”

The latest Eurostat News Release indicates that Irish consumers pay 29% above the EU average for food and non-alcoholic drinks and 67% above the EU average on alcohol.

Mr. Cribben added, “The latest Eurostat figures support what we have been saying about the conduct of the vast majority of supermarkets in this country.

“What the bare Eurostat figures hide is the fact that in Ireland we pay over three times the EU average in excise on beer and nearly three times the EU average in excise on spirits .

“When you take this into the equation, it is not hard to see that what the supermarkets are actually charging on alcohol is, actually, extremely low. In many cases they are covering their excise and VAT costs but little else. In some cases not even these regulatory costs are covered.

“The consumer is losing out through higher prices and the farmer/primary producer is being squeezed on the other side.

“Once again, we would ask the Government to take a serious look at regulating this practice that allows supermarkets to sell alcohol below cost and inflate the price of staple products, especially food, to compensate.”