Breweries saying ‘cheers’ to alcohol minimum pricing
BREWERIES are ‘laughing all the way to the bank’ in the wake of the Government’s controversial decision to impose minimum pricing on alcohol, a leading economist has warned.
The Coalition has attempted to justify the unpopular move on the basis of it being a health measure to reduce alcohol consumption.
However, financial expert Seán Barrett said its main impact will be a €78m ‘bonus’ in profits for breweries and distilleries. Mr Barrett also described it as a ‘socially regressive move where alcohol is being priced out of reach for working and poor communities’.
The respected economist told the Irish Mail on Sunday: ‘The evils of alcohol are, according to this levy, applicable to members of the lower socioeconomic groups only. These minimum price levies will not be collected on dutyfree sales at airports, purchases of premium brands and alcohol purchased in upmarket lounges, hotels and private clubs.
‘Under any conventional economic theory, the scheme operating for minimum pricing since January 4 in Ireland would be regarded as highly regressive. Aside from enriching the alcohol trade by €78m in extra profit a year, it is sending the bill for this to lowincome people.’
Government TDs also said the move to end lowcost alcohol is fuelling a backlash from the public, angry over soaring price rises and rampant inflation.
One source told the MoS: ‘It is up there with energy and food. We are being told that we are the new puritans – you can’t drive the car, you can’t heat the home and now you can’t even have a drink. People are fed up.’
Anecdotal evidence indicates the new regime is already being circumvented by a major increase in cross-border shopping in the wake of the North’s decision not to simultaneously impose a similar minimum price order, which means low-cost alcohol is now up to 50% cheaper across the border. Retail Excellence managing director Duncan Graham said ‘it is something we are watching very carefully’.
And one minister admitted: ‘This is set up to be a debacle. There is no need for this legislation. It will only drive jobs and sales north of the border and not impact in the slightest on problem drinkers.
‘The problem is that the Department [of Health] has been at war with drink for a decade. Everyone is terrified of taking them on. They want to bring in prohibition and turn us into a dry state.’
In a scathing analysis of the minimum pricing policy, Mr Barrett expressed particular surprise at the decision to allow drinks companies to ‘pocket’ the €78m of revenue generated by the move.
He told the MoS: ‘Previously, when economic policy was used to deal with social issues, the revenues were lodged in the Exchequer as government revenue and the funds were used by governments to tackle the social costs.
‘Did the Government hand over minimum tobacco prices revenue to the tobacco sector? No – the extra tax revenues went instead to tackle the social costs of tobacco. Enriching the sectors which produce social costs is a new economic policy development.
‘It has created the scenario where the alcohol sector is laughing all the way to the bank.’
The Trinity College academic also questioned the need for a ‘war on alcohol’.
‘Alcohol consumption has fallen by 25% over the years 2001 to 2019 and by a further 10% in 2020,’ he noted.
‘The Healthy Ireland Survey (December 2021) found that 42% of drinkers were drinking less. Our consumption levels are exceeded by France, Latvia, Austria, Hungary and the Czech Republic.
‘There are 17 countries at about Irish consumption levels. This raises serious questions about all this indignation among policymakers about harddrinking Irish socioeconomic groups and young people.’
Mr Barrett added: ‘This is an absurd piece of legislation.’
In response to queries from the MoS, a Department of Health spokesman said: ‘Minimum unit pricing targets the very cheapest alcohol relative to its strength because the price is determined by, and is directly proportionate to, the amount of alcohol in the drink.
‘Because harmful drinkers tend to buy cheaper alcohol, minimum unit pricing directly impacts harmful drinkers the most and impacts moderate or light drinkers less.
‘A general excise increase would impact all drinkers equally and would therefore have an unnecessary and disproportionate impact on moderate or light drinkers on lower incomes.’
‘It will only drive sales north of the border’