NOffLA calls for reversal of excise duty increases in pre-Budget submission
As part of its Pre-Budget Submission, the National Off-Licence Association has called on the government to help save the remaining 5,300 jobs (or 1,669 businesses) in the independent off-licence sector.
Print21 August 2013
Representing 315 independent specialist off-licences, NOffLA has seen over 3,000 jobs lost since 2008 in the independent off-licence sector through the closing or lapsing of 544 off-licences (wine and/or beer and/or spirits) since 2009.
In last year’s Budget, the Government introduced excise duty increases on beer & cider of 22% while increasing excise duty on spirits by 18% and by 41% on wine and NOffLA’s submission hopes to stem further job losses via the following recommendations:
Reverse the 2013 excise duty increases
The Government increased excise duty in the 2013 Budget stating it would raise an extra €180 million for the Exchequer (equating to 21% more than 2012’s figure). However, revenues are dangerously below this target, with only €29 million extra being collected up to May 2013 (or 9.7% higher than in the same period in 2012).
?“This is only 16% of the €180 million target and strongly suggests that this excise duty rise is failing,” states the Association, “Also, this poor performance is being felt on the ground. In a survey in May 2013, 75% of NOffLA’s members (80 respondents) said that they were experiencing a serious volume decline in sales in 2013 due to higher excises.
NOffLA points out that the Government’s increase in excise duty had the effect of fuelling declines in overall duty paid by retailers.
In the period January to May 2013 the duty paid on beer had declined by 13% while it had declined by 16.3% for spirits, 9.8% for wine and 16.3% for cider.
NOffLA asks, “Is the revenue raised through excise good enough to justify the countless job losses, business closures and increases in illicit trade that have resulted? The Association urges Government to reduce the level of excise”.
Ban below-cost selling of alcohol
The Exchequer is currently losing out on a much-needed €21 million through below-cost selling of alcohol where retailers can reclaim VAT on the losses they incur on products chosen to be sold below cost such as alcohol.
“If this irresponsible practice was banned, this €21 million would be returned to the Irish State,” claims NOffLA, “Inaction on these two issues is having devastating consequences for independent off-licences. There were 21 off-trade closures in 2012, while 10 have already closed their doors for good in 2013. If nothing is done, NOffLA expects a further 10-15 business to shut up shop this year and another 20-25 closures in 2014.”
Speaking at the launch of its pre-Budget submission, NOffLA Chairperson Evelyn Jones said, “If Government doesn’t act now, the remaining 5,300 jobs in our sector will be lost forever. Our members are based across the length and breadth of Ireland and provide much-needed jobs to every area of the country. If these jobs disappear, they won’t be replaced. If action isn’t taken, continued job losses will cause immense damage at a time when employment is scarce.
“If excise duty is cut and a ban on below-cost selling of alcohol is introduced, our members have a fighting chance in a tough economic environment. NOffLA members have always paid their fair share to the Exchequer but the current unfair trading environment means off-licences will continue to close at a shocking rate and this has a hugely negative effect on the State’s economic wellbeing. Government must act now.”
NOffLA’s submission pointed out, “Overall, sales in the off-trade are continuing to grow, as they account for nearly 60% of all alcohol sales today. However, the majority of this is confined to the multiples, discounters and symbol groups in the sector, which hold 78.2% of this share”.
NOffLA Chairperson Evelyn Jones – “If excise duty is cut and a ban on below-cost selling of alcohol is introduced, our members have a fighting chance in a tough economic environment”.
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