Retailers fear drop in margin when Lottery privatised

Retailers say they cannot afford to receive any reduction in the commission they earn on National Lottery ticket sales
Retailers say they cannot afford to receive any reduction in the commission they earn on National Lottery ticket sales

With The National Lottery being privatised later this year retailers are worried that the 6% margin could be reduced and are calling on the government to retain it at current levels



14 May 2012

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Public Expenditure Minister Brendan Howlin has refused to guarantee retailers will still receive the 6% margin they currently earn on National Lottery ticket sales when the lottery is privatised later this year.

However his department has contacted retailers’ group RGDATA and director general Tara Buckley told ShelfLife that it is arranging a meeting with the officials who manage the National Lottery licence process to discuss the matter.

Last month, Minister Howlin announced a new 20 year National Lottery licence that would raise in the region of €600m for the State; part of which would be used to finance a National Children’s Hospital.

However RGDATA insists that the service is not free to provide and that retailers should retain their 6% margin.

RGDATA director general Tara Buckley said: “RGDATA will be making a strong case regarding this issue and we believe that given the Minister’s comments in the Dáil and in the media that he is supportive of our request.”


ShelfLife spoke to one retailer, Joe Tierney, owner of Tierney’s Newsagents in Navan, Co Meath, who is firmly of the opinion that retailers could not afford to “absorb any decrease in the percentage of commission” they receive at present.


“Currently the €45.6 million commission earned by the 3,800 agent network goes a long way towards keeping many of them from closing their doors. On average the commission across the network per store is around €12,000.


“Any full percentage point reduction here would automatically lose the average agent €2,000 or €40 per week. However the independent agent and those that are owner operated consistently perform at the highest level of lottery sales and as such stand to lose an even greater amount.

“Most retailers have scaled back their labour costs and any other reductions in expenditure have already been made, just to stay open. In many cases, the commission lost would be the equivalent of a staff member’s daily wage.

“Due to the cost of the new licence and the insistence of the government that 31% must be maintained for good causes, it is most likely that less prize money will be available and less and smaller prizes will lead to less sales.

“I believe that a National Children’s Hospital is an excellent cause. However I think it’s a cost that should be shared equally within our country and I don’t believe it should be used as a further tool to break up the already fragile existence of the local newsagent and grocery store.

“When you talk about good causes, surely preventing the further closures of rural and urban retail stores that provide both employment and a service to their local communities should be considered such,” he added.




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