Publicans have called on the Government to introduce a novel “lid levy” of 15% on all off-licence sales in next week’s budget in a bid to raise extra taxes and counteract the problem of the availability of cheap alcohol.
The country’s two representative bodies of publicans — the Vintners’ Federation of Ireland and the Licensed Vintners’ Association — claim the controversial measure could raise €240m per annum for the exchequer.
If accepted by the Government, it would see the cost of a €1 can of beer rise to €1.15. Combined off-licence sales of beer, spirits, wine and cider totalled over €1.6bn last year.
The VFI and LVA claim the “lid levy” would also address concerns about the availability of cheap alcohol in supermarkets which were raised in the recent Steering Group Report on a National Substance Misuse Strategy.
LVA chief executive Donal O’Keeffe said the “lid levy” unlike the proposal for minimum pricing for alcohol, which is also under consideration by the Government on foot of the report, would provide much-needed revenue for the exchequer.
Mr O’Keeffe said the proposed levy also had the added advantage of not being likely to run foul of competition legislation.
The VFI and LVA claim the measure would indirectly benefit publicans by helping to protect 50,000 jobs in 6,000 pubs operated by their members.
They warned that any increase in excise on alcohol, which already has some of the highest rates in the EU, would be “a crude and easy option” and would be disastrous for their trade.
“We know the Government needs to generate income so we are giving them a solution that raises the necessary revenue but protects jobs and businesses at the same time,” said VFI chief executive Padraig Cribben.
He accused supermarkets of engaging in highly irresponsible behaviour by targeting promotions at the time when people received social welfare payments like children’s allowance. The VFI and LVA also claim alcohol is sold at below cost in a large number of supermarkets.
“We have the situation now where alcohol is cheaper than water or chocolate,” he said.
Vintners claim sales in pubs have fallen 34% over the past five years as a result of the move towards consumption of alcohol at home — a development which they argue coincided with the abolition of the Groceries Order which prohibited below-cost selling.
Both pub owner groups claimed their “lid levy” proposal represented “legitimate self-preservation”. They also said they were encouraged by a recent meeting they had with Finance Minister Michael Noonan on the issue.
However, the proposals were strongly opposed by the National Off-Licence Association who claimed the measure, if introduced, would adversely affect an already fragile and vulnerable sector.
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