Ireland: Off-licences seek ban on below-cost selling of alcohol

Source: irishtimes.com

Dominic Coyle

July 11, 2016

The umbrella group for off-licences is calling on Government to reduce excise duty and ban below-cost selling of alcohol.

In a pre-budget submission, the National Off-Licence Association (NOffLA) said Ireland had the highest excise on wine in the EU and the third highest tax on beer and spirits.

It claimed the budgetary hikes on excise made during the financial crisis have pushed many off-licences to the brink of commercial failure.

Retailers and suppliers have to raise and pay an extra ?17,958 per 1,000 cases of wine in excise and Vat due to increases in Budget 2013 and 2014.

The sector’s difficulties are exacerbated by competition from mixed traders, mainly supermarkets, which now control about 80 per cent of alcohol sales in the Republic.

The group claimed supermarkets typically absorb tax increases on popular products – by as much as 68 per cent – to keep alcohol prices low and maintain footfall.

The group, which represents about 300 businesses – employing 5,900 people in the Republic, wants the Government to reintroduce a ban on the below cost selling of alcohol.

Alcohol Bill

The Public Health (Alcohol) Bill, which is before the Dáil, contains provisions for the establishment of minimum unit pricing measures to prevent below-cost selling.

A potential obstacle comes in the form of a recent European Court of Justice ruling, which found similar legislation in Scotland contravened EU law.

As part of the submission, NOffLA released the results of its 2016 member survey which indicated that 55 per cent of off-licences would struggle to remain open if the current level of excise is increased in Budget 2017, jeopardising thousands of jobs.

Conversely, the survey suggested if the current level is excise is reduced 81 per cent of respondents would re-invest in their business.

“We are calling on the new Government to take positive and decisive action that will safeguard jobs, encourage local investment and ultimately contribute to the development of local communities,” Noffla’s government affairs directior, Evelyn Jones, said.

“A reversal of the punitive Budget 2014 excise increase on alcohol combined with a reduction of the tax on wine, which is significantly higher than that of cider and beer, would facilitate business and indeed consumer choice,” she said.

“Finally, we believe tighter controls on out-of-state online retailers should be introduced to promote higher levels of responsible retailing thus protecting the general public, alcohol consumers and retailers,” she added.