The Alcohol debates update

"... We are not at variance with those who state that below-cost selling is an issue. We do not disagree in that regard. We are just trying to alert the committee to a much more serious problem...." - Chairman Jerry Buttimer.
"... We are not at variance with those who state that below-cost selling is an issue. We do not disagree in that regard. We are just trying to alert the committee to a much more serious problem...." - Chairman Jerry Buttimer.

In the first of a series of meetings that the Joint Committee on Health and Children is to hold on the issue of alcohol marketing, with particular reference to minimum pricing and the targeting of younger people, a discussion took place recently at which a number of people made presentations to the Committee including Mick Devine, Clinical Director and Clinical Manager at Tabor Lodge; Finbar Cassidy, Treatment Manager at Fellowship House and Eileen Crosbie, Treatment Manger at Renewal Women’s Re

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Off-trade

28 November 2011

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Committee Chairman Jerry Buttimer welcomed those making presentations that morning. A number of Deputies listened to what they had to say about treatment services for both drugs and alcohol, raising questions afterwards.

Chairman Jerry Buttimer: … Mr Devine referred to restrictions in advertising and sponsorship, so perhaps he could expand on the proposals he has in mind. We know that Heineken and Guinness still sponsor many sports, which could potentially glamourise alcohol use. It is an issue that needs to be dealt with in the context of alcohol misuse….

Deputy Denis Naughten: … European research shows that young people are very price-sensitive concerning alcohol and its sources…. What is Mr Devine’s view of the ban on below-cost selling of alcohol or some sort of a unit charge?…

Senator Colm Burke: … The big change over the last five years is drinking at home, in apartments or houses. That is evidenced by the fact that four pubs within half-a-mile of UCC have closed in the past four or five years. No new licensed premises have opened in that period, which indicates the volume that is now being consumed at home…

Mick Devine: …. It is clear that there must be control over the promotion of alcohol, especially to young people. The alcohol advertisements are the best on television; they really get to us. The latest one for Guinness associates strange things that happen in the dark with drinking Guinness. The advertisements are very seductive. A young person believes that if he or she drinks Guinness, magic things will happen. He or she divorces his or her experience from that of the following morning… The advertisements stop short of portraying the aftermath. Therefore, the control of alcohol promotion is necessary… Home drinking has exacerbated the problems of alcohol abuse and dependency for the woman. Bearing in mind that it might not have been so possible for her to behave in a drunken manner in the pub, she is drinking more as the pub trade diminishes and the focus of drinking shifts to the home. As she is buying wine as a loss leader, the consumption of alcohol in the home is increasing alarmingly… It is now common to expect someone between 18 and 35 years to be poly-addicted. Individuals in this age bracket are still reporting that alcohol is the favourite, first and main drug, but they are using others also…..

Deputy Robert Dowds: … I presume the delegation believes the current self-regulation of alcohol advertising to protect children is simply not working. This is my impression… To what extent is the development of children being hindered by excessive exposure to alcohol advertising? I am a strong advocate of minimum pricing. While it may not deal with the severe alcoholics it deals with some of the binge-drinkers. Does the delegation believe we would be better off if there were more restrictions on the number of places where drink can be bought?
I urge caution with regard to the delegation’s comment on higher tax on alcohol. It might work in Cork but Cork is a long way from the Border. If alcohol is very expensive in areas from Dublin northwards, people will make trips across the Border…

Deputy Regina Doherty:     … The vast majority of people in this country do not abuse alcohol; they use it as a social element of a meal out on a Friday night or it is a matter of a glass of wine with dinner with family and friends on a Sunday. The vast majority of people in this country use it responsibly and therefore, I do not believe they should be hindered by an increase in the price or the taxes on it. It is unreasonable to have such sweeping responses to what is a problem in a small section. I do not believe such draconian measures are measured…

Deputy Robert Dowds: … I agree entirely with Deputy Doherty that most people who use alcohol do so responsibly but I also take the view that to tackle the issue we must do so in a way that encourages responsible drinking. This is more likely in a pub situation rather than at home because there are various knock-on effects of abuse of alcohol in the home…

Mick Devine: … Alcohol advertising provides the best ads. Young people will find them seductive.… The situation is getting worse. There has been a five-fold increase in the number of off-licences in Ireland between 1990 and 2006, according to Alcohol Action Ireland’s website. …

Deputy Regina Doherty: … I appreciate there have been different reports over the years which have not necessarily been implemented. Having sat around this table at this committee for only a few months, I can state the will is absolutely present. Every time we discuss this issue, we are all in agreement. There is far too much alcohol available. In certain instances this is not because of taxation measures but because of below-cost selling. There is enormous will and commitment from all members that this practice and the role alcohol plays in this country need to be changed. We are going, please God, to take action in order to effect such change…

Chaiman Jerry Buttimer: … This morning’s edition of the Irish Examiner contains a report in respect of the selling of alcoholic drinks for 98 cent each at a nightclub in Donegal and states that the HSE “has called for a ban on cheap alcohol promotions”… It has become fashionable for people between the ages of 16 and 25 to consume alcohol. I am of the view that pictures of President Obama and Queen Elizabeth ll drinking Guinness send out the wrong message. That is not the image of Ireland I want to be broadcast across the globe…. At one level we are stating that below-cost selling is not an issue but the article in this morning’s Irish Examiner indicates that as a result of a drinks promotion at which alcoholic beverages were on sale for 98 cent each, 26 people presented at the Accident & Emergency unit of Letterkenny General Hospital… We are not at variance with those who state that below-cost selling is an issue. We do not disagree in that regard. We are just trying to alert the committee to a much more serious problem. It is very welcome to hear members state that the political will to tackle this problem exists…

Deputy Regina Doherty: … We are all stating that the political will does exist. I will be interested to see what happens in the coming months when it comes to the crunch of actually implementing some of the proposals we are discussing. I am informed that the two previous Governments had the will to deal with this matter. However, legislation to ensure that groceries and supermarkets would have separate entrances for their off-licences suddenly disappeared as a result of influence being exerted. I do not get that; it does not cut any mustard with me. Such influence should not be exerted within society. Big business and the drinks industry certainly have no influence over my life.
I do not know what the previous Government was thinking – I certainly do not agree with what it did – when it permitted a massive increase in the number of locations at which alcohol can be bought. That Administration appeared to be of the view that if alcohol could be purchased in every corner shop, supermarket, train station and petrol station, then perhaps people would not buy as much of it. For God’s sake, we are Irish and such a strategy would not work in this country. If we are in agreement that alcohol is a drug – albeit one which can be used by reasonable individuals – then it must be regulated and must be sold at far fewer locations than is currently the case… Today, however, 13 and 14 year-olds can walk into large supermarkets and buy alcohol freely. In my opinion, such outlets have no business selling alcohol. Until we restrict and properly license the sale of alcohol, then people both young and old will continue to abuse it.

Chaiman Jerry Buttimer
: … Have those in the drinks industry been responsible in their attitude to this matter? I accept that we are discussing commercial entities here and that their main goal is to make money. Have vintners and those who run off-licences taken a responsible approach?

Mick Devine
: …. Those in the drinks industry are interested in selling as much alcohol as possible. As a result, there is a need for outside regulation…

Chaiman Jerry Buttimer: … There is a willingness among members of the committee to take action in respect of this matter and we have adopted it as one of our priority topics. This is the first in a series of meetings we are holding to discuss the issue of alcohol…  If our guests wish to do so, they are more than welcome to make a written submission to the committee at the end of the series of presentations it proposes to receive. I again thank them for coming before us….

Topical Issue Debate – Alcohol Products Tax
A further debate on Alcohol Products Tax was held in the Dail later that day in which Deputy Michael McNamara spoke on the subject of the drift to off-sales.

Deputy Michael McNamara: … I draw the attention of the House to the increase in off-licence sales and decrease in on-licence sales and to some of the consequences of this for the State. Official figures from the Revenue Commissioners suggest two-thirds of beer purchased in Ireland is purchased in pubs, with one-third being purchased in off-licences. However, industry sources suggest the figure for pubs is somewhat lower and for off-licences is higher.
Currently, there is a five per cent per annum reduction in the amount of alcohol purchased in licensed premises. However, there is no such reduction in regard to alcohol purchased in off-licences. We will soon reach a situation whereby half of all alcohol purchased in Ireland will be from off-licences rather than pubs as has been the tradition heretofore. This has a number of consequences for the State which are not good, the obvious one being a loss in revenue to the Exchequer. Even if the same amount of alcohol was being sold – it is not because there is a decrease in this regard – VAT is at 21 per cent. Therefore if, for example, supermarkets sell beer at €1 per can as a loss leader, which they are and have been doing, the VAT to the Exchequer is relatively small. On the other hand, the VAT to the Exchequer from the purchase of alcohol from licensed premises at a considerably higher price is much greater… A number of jobs are under threat because of the shift from the consumption of alcohol on licensed premises. Approximately five rural pubs are closing every week with a resultant loss of employment. By-and-large, pubs are family businesses which employ people on a casual basis. In response to a question from Tourism Ireland brand tracker in regard to what people look forward to doing when visiting Ireland, 46 per cent of visitors from France, 43 per cent of visitors from the US and 40 per cent of visitors from the UK said they looked forward to visiting an Irish pub. Unsurprisingly, no one looked forward to going to an Irish off-licence as it is hardly a unique experience… I wonder if the move from consumption on licensed premises to off-licence sales could be addressed in the forthcoming budget, even if this means favouring the sale of alcohol from an excise or tax perspective in pubs, which are supervised environments…
I believe many of the difficulties being experienced on our streets is the result of young people purchasing large amounts of alcohol in off-licences, drinking it at home and then going out onto the street. I ask the Minister to try to address this through taxation measures…

Minister for Finance (Deputy Michel Noonan): …It is accepted that there has been a general trend towards off-sales in recent years. High pub prices, price discounting in supermarkets, the smoking ban and the introduction of random breath-testing for drivers have all contributed to this shift towards the off-trade. While this movement is excise-neutral there is a loss of VAT from sales at lower off-licence prices. A report on the Irish beer market in 2010 published by the Irish Brewers Association earlier this year indicated that in 2010 some 33.4 per cent of beer was sold through the off-trade as compared with 28.9 per cent in the previous year. This is in line with anecdotal evidence of a trend over time away from on-trade to off-trade…

Deputy Michael McNamara: … I thank the Minister for his detailed response. The loss of VAT from sales at lower off-licence prices concerns me. Perhaps the Minister would consider addressing this issue, even if this means raising VAT on off-licence sales so as to ensure licensed premises are better able to compete. I understand there would be legal difficulties in doing so owing to European Union law. However, as I understand it, Portugal applies a higher taxation level for alcohol sold in off-licences. Perhaps the Minister would consider introducing similar measures in Ireland to try to protect the few rural pubs remaining…

Minister for Finance:… The same tax regime applies in respect of alcohol products whether sold off-trade or on-trade. There is no variation in that regard. There would be no possibility of distinguishing for VAT purposes between off-licences and public houses. Pricing in respect of alcohol will be a key issue in the recommendations of the steering committee on substance misuse, which is expected to be published shortly. The recommendations contained in that report will form the basis for a Government action plan on alcohol due early next year. The Deputy could perhaps commence the debate here and continue it when the report is published. We might be able to make some progress by approaching it from a different direction.

 

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