The National Off-Licence Association (NOffLA) today launched its pre-Budget Submission (29 July) and called on Government to reverse the 2013 excise duty increases and implement a ban on below-cost selling of alcohol.
NOffLA’s pre-Budget Submission recommended that (1) there are no further increases in excise duty and a reversal of the 2013 increases; and (2) measures are introduced to stop the retailers selling alcohol below cost at cut throat prices. NOffLA, which represents 315 independent specialist off-licences operating under certified responsible retailing standards, has seen over 3000 jobs lost since 2008.
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Last year’s Budget introduced substantive increases in the alcohol excise duty of beer and cider (+22%), spirits (+18%) and wine (+41%). This has already had a hugely negative impact on independent off-licences with ten closures so far this year.
Increased excise duty has also had the effect of fuelling declines in duty paid by retailers to the government, as from January-May 2013, the duty paid on beer declined by 13%, spirits by 16.3%, wine by 9.8% and cider by 16.3%. The purpose of the excise duty increase in last year’s budget isn’t being met and this has had a knock on effect of causing significant volume declines across all alcoholic beverage categories.
Speaking at the launch of NOffLA’s pre-Budget submission, Chairperson Evelyn Jones, said: “Raising excise duty on alcohol is too often looked upon as a quick source of Exchequer funding, however such repeated measures have instead resulted in a dramatic reduction in taxable consumption and a subsequent rise in the Black Economy.”
“In addition to this, below cost selling allows large multiple retailers to use alcohol as loss leaders, losing the State €21million a year while also retailing alcohol in an irresponsible manner.”
“At present, NOffLA members face immense economic pressures and a grossly unfair trading environment. NOffLA calls on government to support independent off-licences as they are indigenous business based in every corner of Ireland. Further job losses will be to the detriment of our industry and also the Exchequer, action is needed now”, said Jones.
In addition this, such high excise duty has helped to fuel the black economy. Irish taxes on beer are the fourth highest in the EU, cider the second highest, spirits the third highest and wine the highest in the EU.
Alcohol products are prime targets for counterfeiters in the European market due to their brand value, high tax and the excise component of the final price. According to the Revenue Commissioners, the number of seizures of counterfeit and contraband alcohol in Ireland has increased from just above 100 in 2008 to over 350 seizures in 2012.
Meanwhile, as also recommended, a ban of below cost selling would see the State earn an additional €21 million each year and it would also ensure much higher retailing standards concerning alcohol as it would eliminate deals promoting heavily discounted branded alcohol.