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Thursday 28 August 2014

Struggling off-licences warn of closures if excise duty is raised

Aideen Sheehan, Consumer Correspondent

Published 02/06/2014 | 02:30

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Ruth Deveney at her off-licence in Dundrum. Picture:Arthur Carron
Ruth Deveney at her off-licence in Dundrum. Picture:Arthur Carron

OFF-LICENCE owners are feeling the squeeze of continued tax hikes on alcohol with half reporting a drop in sales last year.

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And six out of 10 warn they might have to shut up shop if the Government loads any more excise hikes on drink.

A survey of members of the National Off-Licence Association (NOFFLA) found that half reported a drop in turnover in 2013 compared with the previous year.

And 58pc said that further excise hikes in October's budget would make it a struggle to stay open next year.

After excise hikes of €1.50 per bottle of wine in the last two years, Irish consumers now pay almost €5 out of every €9 for a bottle of wine straight into government coffers, the NOFFLA said. This compares with Spain, Italy and Germany where there is no excise duty on wine.

And over €16, or two-thirds of the cost of a €24 litre bottle of spirits, goes to the Government, and €0.70 on every 500ml can of beer.

NOFFLA will launch its pre-budget submission today calling on the Government to reverse the excise hikes of recent years and stop the sale of below-cost alcohol by supermarkets.

It warned that 3,000 jobs had been lost in the independent off-licence sector since 2008, and 61pc of owners said they will have to cut more positions if any more taxes are loaded onto alcohol.

However, more than half said they would be able to hire more staff if excise was cut.

High excise duty fuels the black economy leading to more smuggling, and illicit cross-border trade, warned NOFFLA chairwoman Evelyn Jones.

"Increasing excise duty does not discourage alcohol consumption, rather it contributes to unemployment, promotes criminal activity and removes all public health controls," she said.

NOFFLA is also calling for a ban on below-cost selling of alcohol arguing that this would be more effective than minimum unit pricing in reducing harmful consumption.

It warned that supermarkets used discounted alcohol to drive footfalls, and this also cost the Exchequer €24m in lower VAT returns. The NOFFLA feels Ireland is way out of sync with the rest of Europe on excise rates and this has had a negative effect on tourism and encouraged cross-border shopping.

Irish Independent

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