Shambolic alcohol bill needs pouring down the sink
The changes will take excise revenue out of State coffers and instead hand it to retailers in the drinks trade, writes Sean Barrett
THE success of government backbenchers last Thursday in delaying the Public Health (Alcohol) Bill until next year deserves support and comes as no surprise.
While denouncing the drinks trade, the promoters of the bill are enriching it by more than €78m a year. This has been known in Leinster House since December 16, 2015. The Oireachtas Library and Research Service digest on the bill estimated on page 32 that retailers “are expected to benefit €69m off trade” and €9.3m on trade per year.
Overall revenue to the Exchequer is estimated to reduce by €34.43m a year.
These results happen because the bill increases the price of drink purportedly to reduce consumption but allows the drinks retailer to pocket the extra revenues.
Before now, parliaments increased excise duties on drink and the revenues accrued to the Exchequer. The higher prices discouraged consumption of alcohol and the Exchequer revenues were available to fund some of the social costs of alcohol, includ- ing health service costs. At the time, I nominated Michael Noonan and Brendan Howlin, the ministers ably administering the public purse, as far more worthy recipients in the public interest of drink taxes than the drinks trade.
Today, I renominate Michael Noonan and Paschal Donohoe, current custodians of the public purse, for that role. I remain opposed resolutely to a bill enriching the drinks trade by more than €78m a year.
The source of the bill’s largesse for the drinks trade is large price rises alias minimum pricing.
According to the Oireachtas Library and Research Service, the bill increases drinks costs in off-licences as follows: beer up 44.2pc, cider up 24.9pc, wine up 19.1pc, spirits up 18.6 pc, all off-licence trade up 29pc.
Prices will rise by 0.2pc in the on trade, and prices will rise by 11.1pc in the combined on and off-licence trade.
Excise duties rises of these magnitudes would not have been passed by the Oireachtas even though a large part of the revenues would have been spent on the health services. It is bizarre that the Department of Health is proposing these increases knowing that all of the revenues will accrue to the drinks trade and none to the health sector.
The Department of Health has known for a year that it is promoting a bill that enriches the drinks sector as an allegedly health promotion measure.
The Public Health (Alcohol) Bill should be retitled The Alcohol Retailers Enrichment Bill and subtitled: “A measure to enrich alcohol retailers by €78m per annum.”
Alcohol retailers must be laughing all the way to the bank at this largesse, admittedly unintended, towards them from a government department with the word “health” in its title.
The department apparently thought its bill was to address a problem of an Ireland awash with cheap alcohol and high alcohol consumption by international standards.
The department’s statistics are as misguided as its economics. Alcohol consumption in Ireland has been falling for more than a decade. It has fallen by 24pc from 14.4 litres of pure alcohol per person in 2003-5 to 10.9 in 2015.
The perceived problem of alcohol consumption in Ireland was in fact being solved by the use of excise taxes by successive ministers for finance and a younger generation that is already far more restrained in its consumption of alcohol than in the past.
The reduction in alcohol consumption is reflected in spillover benefits to society as a whole.
The November 2015 statistics from An Garda Siochana, for example, show that road traffic offences were down by 47pc and public order offences were by 36pc over the years 2009 to 2013 inclusive.
Ireland has an alcohol consumption that is below the 11-litre average for the 27 EU member states reporting data for 2015 to the World Health Organisation (WHO). We are in the same category as Germany, Denmark and Spain and lower than France, Finland and the UK.
WHO data indicates there are 26 countries with higher alcohol consumption per head than Ireland. The bill sets a target of 9.1 litres for Ireland. To date, only three of the 27 EU states reporting to the WHO have attained this level: Austria, Italy and Sweden.
Those who espouse the abstemious lifestyle will find little consolation in the WHO data. Life expectancy in Belarus, the country reporting the highest alcohol consumption at 17.1 litres, is 72 years. That is four years more than in Pakistan, where consumption is a mere 0.1 litres.
A strange aspect of the bill is the belief that Ireland’s purported alcohol problems, however exaggerated by ignoring the decline in consumption to a below EU average level, are due only to “cheap” alcohol. Dear alcohol has no such impact. Oireachtas members were assured by lobbyists for the bill that there would be no impact on the price of drink in hotel lounge bars and private clubs. (Good news there, Jeeves!)
The bill’s erroneous view of alcohol consumption in Ireland is based on the impression that it is caused by members of the lower orders, young people, and latterly, women, buying “cheap” alcohol.
It is an absurd proposition that the health aspects of the same product depend on where it is bought.
The EU states that object to this bill are correct in the view that Ireland’s level of alcohol is not now exceptional. They also claim that, were we to revert to the previous level of consumption, the perceived problem could then be addressed by excise taxes.
They see the bill as a measure to increase the retailer share of the selling price while reducing the share of the retail price going to primary producers. The bill is also designed to distort competition at the retail level. It fines consumers €78m, which they had saved by shopping for the same products in more efficient retail outlets — and over that time consumed 24pc less alcohol.
This bill is a shambles. It should have been dropped when the Government changed. The health department has enough to do without promoting legislation to enrich retailers at public expense. I support Health Minister Simon Harris’s reforming zeal. He should not waste time on this bill. It reflects the lack of economic expertise at senior levels of government departments, as noted in the Banking Inquiry.
It shows yet again the power of lobby groups in Ireland and the need for their rebuttal and control.
It illustrates yet again the evils of the whip system in forcing legislation through the Oireachtas. The independent advice of the Oireachtas Library and Research Service and the Comptroller and Auditor General are valuable bulwarks for parliament against the distortions of lobbyists.
The Oireachtas has more than enough research on which it can reject this bill.
‘It should have been dropped by the new Government’