ABFI preaches caution on minimum unit pricing

Patricia Callan, ABFI director
Patricia Callan, ABFI director

The Alcoholic Beverage Federation of Ireland has warned of the unintended consequences of the government's plan to introduce minimum unit pricing on alcohol products, especially on cross-border trade with Northern Ireland.

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2 July 2019 | 0

Following confirmation that minimum unit pricing for alcohol products will come into effect within the next year, the ABFI has released a statement warning against the unintended consequences of the move.
“The drinks industry is in favour of tackling the sale of cheap alcohol to reduce misuse,” said the representative and lobby group director Patricia Callan. “However, the Cabinet already made a decision that the introduction of minimum unit pricing should only be done in conjunction with Northern Ireland, which means the Cabinet would need to reverse this previous decision to now go ahead on its own.”

The reason for the original Cabinet decision is that the introduction of MUP in the Republic of Ireland, ahead of Northern Ireland, will result in an even more dramatic price differential on alcohol products sold either side of the border and will lead to an unsustainable position for border businesses in particular.  The Republic of Ireland already has the second highest prices for alcohol in the EU, according to the latest Eurostat report. “As An Taoiseach, Leo Varadkar recently commented in the Dáil,” said Callan, “we will achieve nothing if all we are to do is encourage people to cross the border to buy alcohol in Northern Ireland. That does nothing for their health and it damages retailers in counties south of the border.

“The consequences of such a policy change must also be considered in the context of the ongoing uncertainty about Brexit. MUP combined with a “no-Deal Brexit” is likely to lead to massive exchequer losses and to a significant rise in cross-border smuggling and illicit alcohol sales,” she added.

The ABFI boss said the  government should wait for clarity on Brexit and the reestablishment of a functioning Northern Ireland Executive before proceeding with the implementation of MUP on the island of Ireland.
“In the interim,” Callan said, “a ban on below-cost selling should be introduced to tackle the sale of cheap alcohol in a quick and effective manner. This would ensure alcohol is not sold as a loss leader and would end the deep discounting that distorts the market.”



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