There has been a marked increase in the number of people buying duty-free alcohol and new laws on minimum unit pricing (MUP) in the coming weeks will only exacerbate this further, as well as drive consumers to the North, retailers have warned.
Minimum pricing for alcohol, agreed by the Cabinet in May, is set to come into effect on January 4th. Under the plan, the minimum price for drinks will be directly related to the amount of alcohol in them. The price will be 10 cent per gram of alcohol.
That means the cheapest 750ml bottle of wine will cost €7.40 (12.5 per cent alcohol) whereas previously it cost less than €5. Wine with higher alcohol content will cost at least €7.75.
A 700ml bottle of supermarket gin or vodka now costing between €13 and €14 will cost €20.71 under the system. A bottle of whiskey will cost at least €22.09.
The minimum price for a 330ml bottle of lager will be €1.12; while it will be €1.78 for a 500ml can of cider; €1.70 for a 500ml can of lager; and €1.66 for a 500ml can of stout. By extension, a slab of 24 cans of lager will cost at least €40.80.
The new law will largely only affect alcohol sold in off-licences, shops, and supermarkets. MUP is not a tax, but the State will benefit from the additional VAT it will receive.
However, Vincent Jennings, chief executive of the Convenience Stores and Newsagents Association, said yesterday the move will simply drive consumers across borders and will only hurt retailers.
“If you are measuring its success by way of reduced sales and equating that with consumption, you are neglecting to note the amount of consumption that is the result of purchases made outside the State,” he said.
“That is the case not only with travel to Northern Ireland, but – don’t forget – because of Boris’s Brexit, we now have duty free.
“It is becoming very, very noticeable and evident that there is a growing level of people buying duty free and MUP is not, and never will be, attached to duty-free purchases. So there is an even greater incentive for people to buy duty free.
“A substantial number of our 1,500 members are based in Border counties, all of which will most certainly suffer from people travelling North to buy product at the expense of Irish retailers and the Irish exchequer.
“This will without a doubt lead to difficulties for retailers. It’s not going to be a difficulty for consumers because they will be able to escape it, but the retailers and their shops will most certainly be affected.
“It’s not just alcohol either. When people travel to buy alcohol they will make additional purchases as well.”
Will it be effective?
Retail Ireland director Arnold Dillon said the measure should have been implemented on an all-island basis, but said shops were now "working to develop and put in place systems to make sure they are compliant with the new rules".
Drinks Ireland, the representative body for alcoholic drinks manufacturers and suppliers in Ireland, said: “There will be a need to review and evaluate this policy measure for effectiveness after a period of implementation.”
Meanwhile, Aldi Ireland group buying director John Curtin said the retailer has been "planning for this significant change in alcohol pricing for some time now".
“We will continue to take a responsible approach to the sale of alcohol at all our stores, and fully comply with all relevant legislation and regulatory requirements,” he added.
A spokeswoman for Lidl said the retailer takes its responsibility with regards to the sale of alcohol "extremely seriously" and is "proactive in adhering and updating our policies in line with legislation".
“Lidl does everything possible to keep the price paid by our customers to a minimum,” she said. “However, as with all retailers, minimum unit pricing will have an impact on the price of some products.”
