PRESS RELEASE - NOffLA members believe Government is ignoring Irish SMEs in favour of tax rebates for large multinationals

(07 Jul 2018)

The National Off-Licence Association (NOffLA) has released its Annual Members’ Survey results, as part of its Pre-Budget Submission to the Department of Finance for Budget 2019. The results show that were excise to be increased in Budget 2019, 76% of members would either be forced to let staff go, or struggle to remain open.

Most worryingly, the 2018 NOffLA Annual Members’ Survey also found that 56% of surveyed off-licences experienced negative growth in 2017, while a further 19% experienced no growth at all in the calendar year. This comes in the context of a dramatically improving macroeconomic position, with Ireland the fastest growing economy in Europe.  

Since 2008, the off-licence sector has lost 3,000 jobs. As such, NOffLA is calling on Government to protect the remaining 5,900 off-licence jobs, which contribute to local communities throughout the country. In its 2018 Pre-Budget Submission to the Department of Finance, NOffLA has called on the Government to:

·        Reduce excise duty on alcohol by 15% (10c on spirits/beer/cider and 50c on a bottle of wine) to support Ireland’s already struggling regional and local economies by increasing rural employment, as well as securing the livelihoods of communities in border regions, particularly in the face of Brexit threats.

·        Apply parity to wine taxation in relation to domestic alcohol. At present, retailers and suppliers need to raise and pay an extra €17,958 per 1,000 cases of wine in excise and VAT due to increases in Budget 2013 and 2014, now totaling €47,035, up 61%.

·        Reintroduce a ban on the below cost selling of alcohol to ensure that retailers cannot reclaim 23% of the loss in their VAT return; saving the State an average of €24 million each year. Such a ban would also ensure that alcohol is retailed in a responsible manner through the elimination of deep discounting.

·        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. Cross-border illicit trade has also been given an added impetus due to the devaluation of Sterling, and the lower rates of excise charged in the UK.

Evelyn Jones, Government Affairs Director of 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.”

“The independent off-licence sector continues to face significant challenges associated with a punitive alcohol tax regime that is not in line with other European nations, and is damaging not only local communities, but also our national competitiveness.”

“Our members are baffled by Government's approach to supporting Irish SMEs, setting the highest excise rates on alcohol in Europe, yet allow large multinational supermarkets sell alcohol at below invoice cost, and therefore reclaim €24 million per annum in VAT rebates. This imperils small or micro-SMEs such as ours, slowly but surely eroding the margins for independent specialists."

“We are calling on the Government to take positive and decisive action that will safeguard jobs, encourage local investment and ultimately contribute to the development of local communities.”

2018 NOffLA Members Survey – Results

·        82% of respondents to the survey noted that their turnover in 2017 was either down or experienced no change when compared with 2016

·        96% of members believe that deep discounting and promotions by large supermarkets have contributed to this decline

·        Approximately 80% of respondents believe that a reduction in the level of excise duty will mitigate against the likely impacts of Brexit

·        71% of members believe that a ban on below invoice cost selling would level the playing field between the independent off-licence sector and large supermarkets

·        Since the first increase in excise duty in 2012, 39% have had to reduce staff by one or more members, 12% of off-licences have been forced to close an outlet and nearly one-in-three have struggled to remain open

·        Almost half of all off-licences are currently experiencing cash flow issues

·        55% of members believe that implementing Minimum Unit Pricing alone will not ensure that alcohol is retailed at a responsible level, but must be supported by a ban on below invoice cost selling (63%)

 



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