Aodhán Ó Ríordáin (Dublin North Central, Labour)
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90. To ask the Minister for Finance if a retailer is entitled to recoup the VAT portion of a loss in their VAT return when they choose to sell alcohol at a price below the cost of purchase; if the reintroduction of the groceries order on alcohol would prevent this from happening; and if he will make a statement on the matter. [31017/13]

Michael Noonan (Limerick City, Fine Gael)
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I would point out that VAT is a tax on the value added to a supply, and the collection and recovery of VAT takes place at each stage of the chain of supply from manufacturing to retailer. Under EU and domestic VAT rules traders who are registered for VAT collect VAT on the goods and services that they sell. In turn such traders are entitled to recover the VAT they incur on their business inputs used in the purchase or production of goods or delivery of services. Consequently, if there is a decrease in value at any stage in the process the trader is entitled to a refund of the excess of VAT incurred over that collected.

In this case, where a retailer is in a situation of net VAT gain as a result of below cost selling, this is not a loss to the Exchequer or an additional benefit to the retailer, it is merely how VAT is charged.

With regard to the reintroduction of the groceries order on alcohol, I am informed by the Minister for Jobs, Enterprise and Innovation that prices in Ireland are generally not subject to control. Pricing strategies are therefore a matter for individual retailers and licensees and are the normal outcome of the competitive process. In this respect, I understand that the Minister for Jobs, Enterprise and Innovation has no plans to reintroduce a groceries order in respect of alcohol or any other product.