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Alcohol tax hikes 'would put independent off-licences out of business overnight'

The National Off-Licence Association said it is strongly opposed to pre-Budget calls for tax hikes. The Vintners’ Federation of Ireland (VFI) and Licensed Vintners’ Association (LVA) have proposed a ‘Lid Levy’.

PROPOSED TAX HIKES on alcohol have been strongly opposed by the National Off-Licence Association, which said it would put the independent off-licence sector out of business overnight.

But the Vintners’ Federation of Ireland (VFI) and Licensed Vintners’ Association (LVA) have said that their proposal for a ‘Lid Levy’ could raise €240m for the exchequer.

The proposal was published with the assistance of leading legal consultants Arthur Cox and Anthony Foley of Dublin City University Business School.

Lid Levy

The groups are proposing a 15 per cent ‘Lid Levy’ on all unopened alcohol products sold in the off-trade, saying it would help to address the issue of the availability of cheap alcohol in supermarkets. They also say it is in line with government thinking on the matter and reflects the recommendations of the Steering Group Report on a National Substance Misuse Strategy.

Donall O’Keeffe, chief executive of the LVA said:

Publicans fully appreciate the difficult economic position the government finds itself in. However, an increase in excise would be disastrous and would put further pressure on already hard pressed publicans. The employment intensive on-trade sector is already suffering major declines, pub closures and job losses on an unprecedented scale.

The groups said that 90 per cent of pubs are family owned and employ 50,000 people, and that these jobs are at risk, with over 5,000 jobs lost in the last three years alone.

Strongly opposed

Speaking today, Evelyn Jones, Chairperson of NOffLA said:

NOffLA is strongly opposed to any additional taxes being imposed on the independent off-licence sector and this includes the publicans pre-budget proposal issued today. This move would put the independent off-licence sector, which is already a fragile and vulnerable sector out of business overnight. There is absolutely no way that the independent sector could sustain this tax.

She said there has been a significant shift in alcohol sales to the off-trade, but “this has not been to the benefit of the independent off-licence sector. In four years, we have lost almost 3,000 jobs in this sector and witnessed 75 business closures”.

Jones added that they expect over twenty more to close next year and that the tax “would certainly speed up the process next year”.

In NOffLA’s pre-budget submission, it called for retention of the current level of alcohol excise duty, a scaling of off-trade licencing fees based on turnover and an introduction of a ban on below cost selling.

Read: 91 per cent of consumers believe Budget 2013 will leave less to spend on groceries>

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