Independent off-licences blame closure rate on below-cost alcohol sales by supermarkets

Mon, Apr 9, 2012, 01:00

THE SPECIALIST off-licence sector will “die a death within five years” unless the Government “urgently” implements key Department of Health recommendations to address alcohol abuse, its representative group has claimed.

The National Off-Licence Association says its members are going out of business at “an alarming rate” as aggressive alcohol marketing campaigns by the large multiples undercut their livelihoods.

Although the received wisdom is that the off-licence sector is thriving, as alcohol consumption moves out of pubs and into the home, the association says about 8 per cent of its members have been forced out of business in the past four years.

While the overall number of off-licences has increased by 342 to 3,308 outlets since 2005, the association has seen 48 of its own members cease trading.

“We now have about 330 members,” according to its chairwoman Evelyn Jones. “There are two types of off-licence – the mixed traders, like Tesco, Dunnes Stores, Supervalu – and then we represent the specialist, independent off-licence, which has an expertise, a passion and respect for alcohol. You don’t get that in the multiples. You get the lowest common denominator sold to you by staff who have no regard for the product.”

The multiples, she says, are killing the independent specialist. Not only are they undercutting on price, but the sale of alcohol alongside groceries means people are as likely to thoughtlessly toss a cut-price bottle of Sauvignon Blanc into their trolley as they are a cheap packet of biscuits.

“Buying alcohol is no longer a conscious act,” says Ms Jones. “That would be fine if we were talking about bread or fruit, but this is a psychoactive substance. Structural segregation is a key issue.”

Her members want commencement of section 9 of the 2008 Intoxicating Liquor Act as recommended by the Department of Health’s steering group on a National Substance Misuse Strategy in its February report.

Section 9 provides for structural segregation of alcohol from other products “by means of a wall or similar barrier”. It also requires a separate till in the segregated area, specifically for alcohol sales.

The section was not commenced in 2008 as then minister for justice Dermot Ahern took on board retail arguments that its implementation would cost €200 million. In return, the industry established a voluntary code of practice on the sale of alcohol, which it said would deliver effective segregation and more self-imposed restrictions on the display and advertising of alcohol.

The industry formed a monitoring body, Responsible Retailing of Alcohol in Ireland (RRAI), independently chaired by Padraic White. He handles complaints on breaches of the code and delivers an annual report to the Minister.

In his latest report, he says: “The key components of the code have been and continue to the implemented by the RRAI’s members in an acceptable manner.”

The code is being reviewed by Minister for Justice Alan Shatter. He is to decide whether it is adequate, and if it is not, the question of whether section 9 should be commenced would be brought to Cabinet “in coming weeks”, a spokesman for his department said.

Both RGData, representing smaller convenience and garage forecourt shops, and Retail Ireland, representing the larger multiples, argue the voluntary code is working well, that the cost of implementing structural segregation would cost jobs and that there is no evidence segregation would address alcohol misuse.

Ms Jones and her members, however, claim there have been numerous documented breaches of the code.

On price, the Government is proposing a minimum price per gram of alcohol. Although no price has been mentioned, Minister of State for Primary Care Róisín Shortall has said she is looking at “something similar” to the 40p per gram being introduced in Scotland.

Ms Jones says this will not address “deep discounting” by the multiples.

Over Easter, Tesco was offering 25 per cent off every six bottles of wine, with many bottles already priced at between €6 and €7. Dunnes Stores had 12 half-litre cans of Miller beer for €16, while at Supervalu, wine prices were cut by up to €8.99 a bottle.

“If a minimum price of 48 cent were brought in, a bottle of wine would have only to be €4.85 to be compliant,” Ms Jones says.

“A 70cl bottle of spirits would have to be €13.41 and a 500ml can of beer would have to be a minimum of €1.03. Minister Shortall’s proposals do not go nearly far enough.”

A spokesman for Retail Ireland said he could not make any comment on pricing issues.

'If a 23-year-old comes in here looking to buy 20 cans of beer I won't sell it to him'

THE 2008 Intoxicating Liquor Act was, says John Fahy, the “death knell” for his off-licence business.

Last year the Ballina man shut for the last time the shop, Fahy’s, that his father had opened 57 years previously.

Section 2 of the Act brought the closing time for off-licences back from 11.30pm to 10pm. However, some other sections of the new law have not been enacted to date.

Section 9 would have introduced structural segregation of alcohol from groceries, while section 16 would have prohibited reduced-price selling of alcohol.

“Our best time for sales was between 9pm and 11.30pm,” says Mr Fahy. “In the immediate months after the Act, I’d say I lost 25 per cent of sales.”

When Tesco, Dunnes Stores and Centra began selling alcohol “at prices I couldn’t touch” his business began to die.

He took the Fahy name down from above the front door on July 4th last year. Although Tommy Cullen, owner of Jus de Vine off-licence in Portmarnock, Dublin, is still open, “business is difficult”.

“People come in to buy gifts and to look, but the volume is gone. People pick up their wine in the multiples now.”

Although business was “not too badly affected” by the earlier closing time, he had thought structural separation would be forced on the multiples. “It would have made our job an awful lot easier. Alcohol should be a conscious purchase.

“We are the pros in this market. I am a responsible trader. For instance, if a 23-year-old comes in here looking to buy 20 cans of beer I won’t sell it to him. I’ll sell him six and tell him it’s plenty.

“We have a huge function for advising people on wines. My staff have all done training on wines and spirits and responsible trading. We have a range you’ll not get in any supermarket.”

Mr Fahy tells how Tesco staff used to send customers up to his shop if they did not stock a particular drink.

“They’d know I’d have it. That’s gone now for the people of Ballina. I feel aggrieved. They enacted the 10pm closing and not the rest that would have given us a chance.

“We all put so much work into the shop, we ran a good show and provided a good service. I do feel aggrieved.”