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VFI Chairman: Supermarkets Charging More to Compensate For Below-Cost Alcohol Sales

Published on Jul 21 2014 5:00 PM

VFI Chairman: Supermarkets Charging More to Compensate For Below-Cost Alcohol Sales

The chairman of the Vintners' Federation of Ireland (VFI), Padraig Cribben, has called on the government to address price-based advertising of alcohol products by retailers, particularly when alcohol is being used as a loss leader.

Cribben, who was addressing the Joint Committee on Finance, Public Expenditure and Reform, said that a "key factor which in the view of the drinks industry needs to be tackled is price-based advertising, be that in the Sunday or daily newspapers - which regularly carry full-page advertisements relating to alcohol - because alcohol is being used as a loss leader.

"In some places this is being portrayed as consumer-friendly, but the opposite is the case, in that what actually happens is that the price of more stable products is increased to compensate for the fact that alcohol is sold as a loss leader. The multiples do not work on small margins."

He added that the government "has been discussing for too long the suite of measures required. We have heard a lot of talk followed by more talk when we need action on pricing, segregation and price-based advertising."

Cribben also called for the government to refrain from introducing higher excise charges on alcohol in the next Budget, saying that increased excise "is a blunt instrument that unfairly impacts on small local businesses and does not deliver on reducing harmful patterns like binge drinking."

He added that high excise levels are leading to "another unadvisable situation - a rise in the black market trade. Seizures of counterfeit alcohol are steadily rising and a number of high-profile seizures this year show that the problem is only going in one direction."

© 2014 - Checkout Magazine by Stephen Wynne-Jones

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