The price of milk alternatives will rise from next year, as the Government plans to hike Vat rates on non-dairy milks as part of this month’s budget.
At present, Vat rates on non-dairy milk products — like almond or oat — is 0%, but as part of the Finance Bill, the rate will be increased to the standard Vat rate of 23%. The change in Vat rates will not take place until January 1, 2025.
Currently, a litre of Tesco own-brand oat drink costs €1.55. Adding a Vat rate of 23% to this could add 35c to it, increasing the cost to €1.90.
Branded oat milk, like Oatly, costs more at €2.95 a litre in Tesco. The additional Vat will hike the price by 68c, increasing the cost of a litre to €3.63.
Social Democrats environment spokesperson, Jennifer Whitmore, criticised the decision by the Government, saying that it will have a “huge impact” on climate and future agriculture diversification.
She said it is “a ridiculous suggestion” from the government when you “consider that those dairy alternatives will be key to meeting our climate emissions”.
“They have a much lower environmental impact in general, whether it is from a water perspective, pesticide perspective and indeed from an energy and emissions perspective.”
Ms Whitmore said that the proposal would negatively impact the diversification of farming.
“They’re actually bringing this measure in that’s going to disadvantage any farmers who are seeking to move into the milk alternative sector and actually do their part for the climate and the environment,” Ms Whitmore said.
“It’s absolutely ridiculous and I do think the Green Party have questions to answer on this.”
Ms Whitmore questioned why the Green Party would allow such a measure to come into effect.
“Why is the Government actually going to disadvantage people who are trying to do the right thing for the environment and indeed, for all those consumers who are trying to do the right thing for the environment?
“Because as we all know, oat milk is more expensive than dairy and this is going to make it a lot more expensive and it will actually push people back into dairy products.”
