Working to reduce alcohol harm

Campaign for excise duty cut ignores the significant harm and costs associated with alcohol misuse in Ireland

Alcohol Action Ireland has said that the cut in excise duty sought by the alcohol industry would only serve to make the very cheapest alcohol for sale in supermarkets even cheaper and come directly at the expense of the health, wellbeing and safety of people in Ireland.

“In Ireland, our harmful drinking has a huge impact on our nation’s physical and mental health, with three alcohol-related deaths every day. Beyond the devastating health consequences for individual drinkers, the harmful use of alcohol causes significant pain and suffering for those impacted by someone else’s drinking, particularly family members, and also places a huge burden on wider society, whether it’s through drink driving, the impact on our health services or alcohol-fuelled crime,” said Conor Cullen, Head of Communications and Advocacy with Alcohol Action Ireland.

Alcohol Action Ireland said that the ongoing alcohol industry campaigns for a cut in excise duty not only completely disregard the significant harm and costs associated with alcohol misuse in Ireland, but by putting their focus on pubs and tourism are also attempting to mask the reality that a cut in excise duty would primarily benefit the sale of alcohol in the off-trade, which has already declined in price during the last year in the absence of a cut in excise duty. (1)

“While vested interests attempt to portray excise duty as a burden on the pub sector, the reality is that the recession, the subsequent impact on disposable income, and the dramatic, ongoing shift of purchasing habits towards the far cheaper alcohol in the off-trade have had the greatest impact on pub trade. Excise duty, as a proportion of the price of a pint in the pub, remains lower now than it was in 2003, (2) so clearly tax is not the biggest issue for the on-trade.

“Ireland does have relatively high levels of excise duty, compared to most of our European neighbours, but the key concern for public health remains that the very cheapest alcohol products in Ireland remain priced at a level that neither reflects the large burden of alcohol harm on Irish society nor even the tax applicable to these products. Supermarkets, in particular, ensure that these products remain at very low levels, using discounted alcohol to attract customers to their stores.

“Since the abolition of the Groceries Order in 2006 alcohol in Ireland can be sold below cost and a retailer can then recover the VAT on the difference between the sale price and the cost price. This means taxpayers are subsidising supermarkets that use alcohol as a loss leader, as well paying for the costs of alcohol harm. The off-trade now dominates alcohol sales in Ireland. The campaign for a cut in excise duty is certainly not about tourism, which is thriving, continues to achieve record-breaking numbers and does not depend on the availability of cheap alcohol in the off-trade. This is simply about selling even more alcohol.”

A price survey carried out by Alcohol Action Ireland in July 2016 shows that purchasing the cheapest alcohol available in the off-trade:

  • It is possible for a woman to reach her weekly recommended low-risk limit of 11 standard drinks for €4.95.
  • It is possible for a man to reach his weekly recommended low-risk limit of 17 standard drinks for €7.65.

“Strong and cheap drinks are the alcohol products favoured by two vulnerable groups – the heaviest drinkers among us, who are most at risk of alcohol-related illnesses and death, and young people, who generally have the least disposable income and are far more price sensitive than older drinkers,” said Dr Declan Bedford, public health specialist and board member of Alcohol Action Ireland.

Heavily discounted alcohol products for sale in the off-trade, particularly supermarkets, is a situation that cannot be adequately addressed by proposed bans on below-cost selling and the Government has committed to tackling the issue through the introduction of minimum unit pricing (MUP), as part of the Public Health (Alcohol) Bill, which can save lives and reduce our burden of alcohol harm as it targets alcohol products that are cheap relative to their strength.

“MUP can be used in conjunction with excise duty as it sets a ’floor price’ beneath which alcohol cannot legally be sold, but the MUP will be set at a level that will not increase the price of any products in the on-trade (e.g. pubs, clubs or restaurants), instead targeting the products that are currently very cheap relative to their strength in the off-trade. MUP is not a tax and it does not set a price an alcohol product must be sold at, it simply sets a level beneath which an alcohol product cannot be sold, and that level is determined directly by the amount of pure alcohol in that particular product,” said Dr Bedford.

Professor Joe Barry, public health specialist and board member of Alcohol Action Ireland, warned that without the implementation of MUP, a reduction in excise duty would only serve to make the very cheapest alcohol in the off-trade even cheaper, significantly increasing the risks for those vulnerable groups who favour the strongest, cheapest alcohol, as well all increasing the burden on all those impacted by alcohol harm.

“Excise duty must continue to be maintained at levels that reflect our significant burden of alcohol harm, as any decrease in excise duty would be of benefit only to those who manufacture, distribute and sell alcohol products, and come directly at the expense of the health, wellbeing and safety of Irish citizens. An excise duty decrease would also increase the large health and economic burdens of alcohol harm,” said Professor Barry.

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References

  1. Consumer Price Index – July 2016: Central Statistics Office;   [Available from: http://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexjuly2016/.
  2. Tax Strategy Group: General Excise Duties (Tobacco, Alcohol, Betting, and Others). Department of Finance; 2015.

Notes

For a full copy of Alcohol Action Ireland’s Pre-Budget Submission, please follow this link.