Oireachtas Joint and Select Committees

Tuesday, 22 October 2013

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Business Closures and Job Losses: Discussion with National Off-Licence Association

2:40 pm

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

I have a number of points. Alcohol is estimated to cost the State some €3.5 billion a year, which works out at about €3,300 per taxpayer. We are dealing, therefore, with a significantly costly and possibly dangerous product and for that reason its treatment is significantly different from that of any other product in the market. That is why off-licences came about, with a special licence to sell the product. All of a sudden there has been a proliferation which extends to fuel stations and multiples. It is my view that alcohol should be removed from those two spaces.

I refer to the market structure in Ireland in respect of multiples and groceries. In 1977 there were 14,000 groceries but in 2007 there were only 7,000, so there has been a vast reduction in the number of grocery competitors in recent years. The type of competition occurring at present is reducing the number of competitors. Tesco and most of the international players take a higher profit in Ireland than they do in other markets because they charge a higher margin on most of their products than they do in other markets, facilitated by loss leaders. This is not of benefit to the consumer in the long run.

I have been saying until I am blue in the face, at this committee and in other places, that unless we create a level playing field with the North of Ireland we are always going to have this problem, with leakages from one part of Ireland to the other. As an island, we need to sit down together when we prepare our budgets. The North is looking for fiscal powers to be able to deal with excise duties, VAT, etc. We see this in other markets - for example, in the area of fuel, with the money spent in tackling fuel laundering. As an organisation, has NOffLA ever considered sitting down with both jurisdictions and asking them to focus together on levelling the playing field for retailers so that we do not have this scenario? At present what is happening is a swing in one direction in regard to currency and tax, which means a boom town on one side of the Border, but there are also swings the other way and boom towns on the other side. That is not a sustainable pattern of growth or development.

There is also the issue of rates. Rates should be profit-based. It is ridiculous that a business person who is making a loss or is barely surviving is charged exactly the same per square foot as Tesco, which is making massive money in this country.

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