The National Off-Licence Association (NOffLA) has released figures as part of its Budget 2017 pre-budget submission to the Department of Finance which shows that a reduction in tax on alcohol by as little as 10c on spirits/beer/cider and 50c on a bottle of wine in Budget 2017, would lead to 54% of businesses taking on more staff and 62% increasing staff pay.
As part of the submission, NOffLA has also released the results of its 2016 member’s survey which shows that 55% of off-licences across Ireland will struggle to remain open if the current level of excise is increased in Budget 2017, jeopardising thousands of jobs. If however the current level of excise is reduced, 81% of respondents would re-invest in their business by increasing product quality and range.
Since 2008, the independent off-licence industry has lost 3,000 jobs and NOffLA is calling on the Government to protect the remaining 5,900. In its pre-Budget submission to the Department of Finance, NOffLA has called on the Government to:
1. Reverse the Budget 2014 excise increases on alcohol as Ireland has the highest excise on wine in the EU and the third highest tax on beer and spirits. As a result of these taxes, Ireland is only behind Finland, Sweden and the UK in having the highest taxes on alcohol in the EU.
2. Restore parity to wine taxation in relation to domestic alcohol as the excise on a bottle of wine is on average 35% higher than the equivalent excise on cider and beer.
3. Reintroduce a ban on the below cost selling of alcohol. The prohibition of the retailing of alcohol at below invoice cost price will ensure that retailers cannot reclaim 23% of the loss in their VAT return; saving the State an average of €24 million each year as well as ensuring alcohol is retailed in a responsible manner.
4. Establish tighter control on out-of-state imports in terms of VAT and excise collection thus ensuring out-of-state and online retailers cannot sell directly to Irish consumers without paying the required tax and VAT. Such controls will ensure online retailers are fit for purpose; tax compliant; and meet the same licencing obligations as domestic retailers.
The 2016 NOffLA Members Survey found:
41% of those surveyed reported a decline in turnover in 2015.
If excise is increased again in Budget 2017, 54% would struggle to remain open and 55%would reduce staff while 38% would be forced to reduce staff salaries.
73% reported reduced sales volumes since 2012 with 45% citing excise increases and 33% citing a lack of legislation as the primary factor.
A reduction in tax on alcohol by as little as 10c on spirits/beer/cider and 50c on a bottle of wine in Budget 2017, would lead to 54% of respondents taking on more staff and 62% increasing staff pay.
In addition to the reduced cash flow due to excise increases, 45% have had their bank facilities reduced, 52% have been impacted by minimum wage increases leading to 66% of respondents experiencing credit difficulties.
70% of respondents believe that a ban on below cost selling will curb heavy and irresponsible discounting of alcohol.
Evelyn Jones, Government Affairs Director NOffLA said; “NOffLA members are significant local employers based in communities all around the country and as such we have a clear view of the economic reality for Irish SMEs. While the economy is improving generally, as with previous years our Members Survey has shown that the recovery is not being felt by all.
We are calling on the new Government to take positive and decisive action that will safeguard jobs, encourage local investment and ultimately contribute to the development of local communities. A reversal of the punitive Budget 2014 excise increase on alcohol combined with a reduction of the tax on wine, which is significantly higher than that of cider and beer, would facilitate business and indeed consumer choice.
We are also calling on the Government to enact the Public Health (Alcohol) Bill in its entirety and as such reintroduce the ban on below cost selling of alcohol which costs the taxpayer €24 million annually. Finally, we believe tighter controls on out-of-state online retailers should be introduced to promote higher levels of responsible retailing thus protecting the general public, alcohol consumers and retailers.