The People's Supermarket is to appeal against Camden Council's decision not to grant it discretionary business rates relief, after it was handed a £78,000 bill for unpaid fees last week.

Owners of the member-owned sustainable food co-operative, which does have a declared aim to make a profit, argued that the store had a "clear public benefit" to the local people and society as a whole, and should therefore benefit from the rates relief commonly granted to non-profit and charitable organisations.

However, Highbury magistrates did not agree, and in a hearing held last week the store was ordered to pay arrears of £35,000, and business rates of £45,000 for 2012.

"My understanding is that because we have a declared aim to make a profit we're less eligible for support and it's counting against us to get funding," co founder Kate Wickes Bull said.

The store has agreed to pay back £600 a week for two years a fact which Wickes Bull said would prevent it from investing in new technology and community projects. She added: "We will comply with the court's judgment, but I feel it has highlighted the difficulties social enterprises face in this country," she added.

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