NOffLa Calls For Ban On Below Cost Alcohol Sales
Published on Jul 12 2016 10:27 AM
The National Off-Licence Association (NOffLA) has called on the Government to ban below-cost selling of alcohol, as part of its pre-budget submission.
It claims that high excise rates have already pushed many off-licences to the brink of commercial failure; a challenge to the sector that it believes is exacerbated by competition from mixed traders that can sell alcohol at a lower price.
The group also claims that the state is essentially subsidizing traders that sell alcohol as loss leaders to the tune of €24 million per year.
It says that if at least 40% of the total alcohol sold in mixed trading outlets in 2013 was sold at below cost, this would equate to €516.8 million (including VAT applied at 23%).
The retail price of €516 million without VAT is €420 million. The VAT collection, or the difference between the two figures, equates to €96.6 million.
‘If the alcohol sales totalling €420 million has been sold at a reduced price of 20% below cost, then these goods would have originally cost €525 million to purchase and the VAT charged on the purchase invoice on the cost of these goods would be €120.75 million,’ it noted in its submission.
‘When these figures are returned to the Revenue, the VAT collected on their sale is €96.6 million. But the VAT charged when they were bought is €120.75 million. Therefore, the Irish Revenue must rebate the difference which is €24 million.’
Its budget submission also asks that the Budget 2014 15% excise duty increase on alcohol be reversed, noting that Irish rates of excise are now 624% higher than the EU average for wine, 298% for beer and 243% for spirits.
It also wants the State to restore parity to wine taxation in relation to domestic alcohol, as well as establish tighter controls on out-of-state imports in terms of VAT and excise collection.
© 2016 - Checkout Magazine by Jenny Whelan