I want to write to you to express my shock at the announcement, in Wednesday’s budget, of an increase of €1 in excise on a bottle of wine. This might seem a soft target for you as a trade with no lobby group, but there is no way you can look at this move in which it makes sense.
1. Tax take
The last time duty was increased a few years ago, there was a rush over the border as people flocked to Newry, Derry and elsewhere in Northern Ireland to buy not only wine, but groceries, electrical goods and everything else. The result was a decline in revenue from excise duty and a swift reversal the following year. A savage increase in tax like this will not only encourage cross-border trade, but will surely encourage smuggling of wine, just like there is of cigarettes. You know where there is a buck to be made, criminals will find a way.
2. Social and Health Aspects
It is well-recognised that we have a less than healthy relationship with alcohol in this country. The most obvious way this manifests itself is in the atmosphere of menace that is present any weekend night not only in Dublin, but pretty much any town and city across the country. The way people drink nowadays is to buy cheap trays of beer and cheap bottles of vodka, go to somebody’s house and get pissed even before they go out. They then hit the town and we end up with fights, people getting sick on the street etc. Wine does not feature as part of this type of consumption. We have a wine shop (we don’t sell beer or spirits) and not only do we not have a problem with requests from under age drinkers – we hardly have anybody under the age of 30 coming into the shop. It is rather unusual for someone to have a couple of glasses of wine with dinner and then go out causing mayhem on the streets.
3. Retail Diversity
This measure plays beautifully into the hands of Tesco and the other multiples. Below cost selling by the multiples is the cause of many of the problems outlined above and has made alcohol cheaper than it has ever been. They use alcohol as a loss leader to build market share in the grocery sector and blatantly ignore so-called “self-regulation” in the alcohol sector by using alcohol as the lead product in advertising and promotions. If you want to see what this dominance leads to, take a walk through any town in the UK and you will see a large Tesco and few other shops apart from bookies and pound shops. Unless you regulate against the multiples, this is the bleak retail future that awaits us as a country. In our case, you need to ban below cost selling and, in order to raise revenue, introduce a scale of licence fees based on turnover. It is wine shops now, next it will be butchers, greengrocers and newsagents.
You claim this was a budget to create jobs. The 10 point plan for SMEs was just a smokescreen which will have no impact whatsoever. The reality is that taking 3.5 billion out of an economy on the edge of the abyss will be disastrous, but specifically with regard to the excise duty, you are putting jobs directly in risk in wine importers, independent off-trade business and the hospitality sector. What is the point of attracting tourists here only to be met by a ripoff restaurant scene with a €4 increase in wine prices in restaurants that leads directly back to your door? Wine shops like mine are certain to close as the difference between what we can offer in price and the below-cost selling supermarkets widens even further.
Do the decent thing and reverse this savage attack on our trade. Tax take on wine and our livelihoods are about to be destroyed.
On the Grapevine, Dalkey