15% off-sales alcohol tax proposed
Publicans have urged the Government to introduce a 15 per cent tax on off-licence alcohol sales in the budget.
The “lid levy” proposal on unopened alcohol sales would raise €240 million for the State while protecting 50,000 jobs and business, the Vintners’ Federation of Ireland and Licensed Vintners Association jointly said.
The proposal had been given to the Department of Finance well in advance of the budget and the Government had “not ruled it out”, VFI chief executive Padraig Cribben said today.
The publicans argue the measure would go some way to meet concerns over the availability of cheap alcohol in supermarkets, as raised in the Government’s steering group on the National Substance Misuse Strategy.
There was political recognition that the “on-trade” was the “most controlled environment” in which to sell alcohol and also had social benefits, Mr Cribben claimed.
He argued that proposed minimum pricing to tackle cheap alcohol off-sales does nothing for the Government, only generates revenue for the retailers and takes time to put in place.
The joint LFV-VFA initiative benefitted from legal advice from legal firm Arthur Cox, in light of which the levy sponsors said they were confident it would stand up to competition law and EU Vat and excise regulations.
The Government is widely expected to increase tax on alcohol on Wednesday, with excise on all drink being the most obvious target.
If the Government decided to raise excise duty in the budget, affecting on- and off-trade alcohol, this would “put jobs at risk” in a situation where the “job intensity is in the pub trade”, VFA chief executive Donall O’Keeffe said. It would “drive a further wedge between the off trade and on trade” because the off trade has the capacity to absorb it, he said.
The calculations are based on some €1.6 billion in off-licence sales in 2011 as per Central Statistics Office figures.
The National Off-Licence Association said it was “strongly opposed” to any additional tax being imposed on the independent off-licence sector.
“There is absolutely no way that the independent sector could sustain this tax.” association chairwoman Evelyn Jones said of the proposal by publicans.
“There has been a significant shift in alcohol sales to the off-trade but this has not been to the benefit of the independent off-licence sector,” she said. The sector had lost 3,000 jobs and seen 75 business closures in the past four years, she said.
IN its pre-budget submission the association called for excise duty to remain the same, a ban on below-cost selling and a scaling of off-trade licencing fees based on turnover.
The Irish craft beer consumer association Beoir described the proposal as “anti-consumer” which amounted to “to punishing drinkers who use off licences rather than pubs”.
“Pubs should be trying to pull customers through the door by providing the products and facilities they want. Attempting to push people in by crippling the competition will be bad for all concerned.” Beoir said in a statement.