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A Quarter of a Billion Euro can be generated by Targeting Off-Trade - VFI and LVA Join Forces to Launch Innovative “Lid Levy” Revenue Generating Proposal

30-November-2012

Publican organisations representing approximately 6,000 members nationwide and employing 50,000 people have developed an innovative proposal that could raise €240m for the exchequer without using the blunt instrument of raising excise.

The Vintners’ Federation of Ireland (VFI) and Licensed Vintners’ Association (LVA) hosted a media briefing today to outline details of this groundbreaking proposal which it hopes government will introduce. The proposal was published with the assistance of leading legal consultants Arthur Cox and Anthony Foley of Dublin City University Business School.

Ireland already has one of the highest levels of excise in the EU with current government take on excise and VAT on alcohol is €1.8bn.
The LVA/VFI are proposing a 15% “Lid Levy” on all unopened alcohol products sold in the off-trade. It goes a long way to protect the employment intensive on-trade sector and 50,000 associated jobs.

The “Lid Levy” also helps address the issue of the availability of cheap alcohol in supermarkets and is in line with government thinking on the matter and indeed reflects the recommendations of the Steering Group Report on a National Substance Misuse Strategy.

Donall O’Keeffe, chief executive of the LVA said; “Publicans fully appreciate the difficult economic position the government finds itself in. However, an increase in excise would be disastrous and would put further pressure on already hard pressed publicans. The employment intensive on-trade sector is already suffering major declines, pub closures and job losses on an unprecedented scale.

“What we have outlined today is a 15% “Lid Levy” which is a simple revenue generating proposal that complies with competition law and EU regulations on VAT and excise and will conservatively generate in excess of €240m.” 

Padraig Cribben, chief executive of the VFI added; “Consumers need incentives to go out and spend their money in the hospitality sector, thereby generating tax revenue, sustaining jobs and supporting this vital part of the economy. Raising excise is a crude and easy option which will only discourage people from going out.

“We are unashamedly saying that this “Lid Levy” proposal will help protect the labour intensive on-trade. 90% of pubs are family owned and employ 50,000 people. These jobs are at risk and over 5,000 were lost in the last three years alone. We know the government needs to generate income so we are giving them a solution that raises the necessary revenue but protects jobs and businesses at the same time.”