The National Off-Licence Association (NOffLA) has called for a reduction of the excise duty by 15% and a ban on the practice of below invoice cost selling, arguing that this would protect the independent off-licence sector from Brexit’s economic implications as well as promote an increase in employment in the industry.
The call, address the Joint Oireachtas Committee, comes after NOffLA’s annual members survey indicated that 34% of members would increase staffing levels if excise duty was to be reduced, with 33% adding they’d increase existing staff’s wages. An estimated of 1,786 jobs across Ireland could be created following a reduction in excise duty.
Jimmy Redmond, spokesperson of the organisation said: “Ireland’s excise regime both stifles employment levels and actively threatens border communities and the independent specialist off-licences operating within them. Excise duty requires immediate, up front funding from midnight on Budget Day, with the uncertainty surrounding its fluctuation from year to year preventing medium to long term business planning in terms of job creation”.
The other practice that NOffLA members pointed out as very negative was below invoice cost selling, a tactic that can only be used by large supermarket chains and that in practice, means that smaller, independent companies operate within an unequal trading environment.
Redmond added that “according to research from the University of Sheffield, UK Supermarkets under-shift price rises on selected alcohol products in response to tax increases, accounting for as much as 68% of their total alcohol sales in some categories i.e. they absorb the increase of a tax to maintain the low prices on their cheapest alcohol for consumers”.
He pointed out that the practice of below invoice cost selling “is likely to impact negatively on tax policy effectiveness, because high-risk groups favour cheaper alcohol and under-shifting is likely to produce smaller consumption reductions”
NOffLA members hope that a ban on below invoice cost selling will help rebalance the market place, have a positive impact on public health initiatives; and save the exchequer some €24 million per annum, given the fact that retailers are permitted to reclaim VAT on losses.
More information: noffla.ie