I thank the committee for inviting us to present to the Oireachtas Joint Committee on Health and Children. I am Evelyn Jones, chairperson of NOffLA, the National Off-Licence Association. I am accompanied by our national spokesperson, Mr. Jim McCabe. We are both owner-operators of independent specialist off-licences.
The National Off-Licence Association, NOffLA, welcomes this opportunity to put forward our opinions on alcohol marketing and minimum pricing and to answer any questions members of the committee may have. We would like to address both of these important issues in the context of the impact on the youth of this country and the business environment in which we operate. Before we do so, I wish to introduce NOffLA - the National Off-Licence Association.
NOffLA was established in 1991 and represents independent specialist off-licences across Ireland. Our association works together with its 330 members, representing 5,600 jobs in 26 counties. Our mission is to promote the responsible sale, marketing and consumption of alcohol and to share best practices with the entire trade. Our members' outlets are specialist or pure off-licences. They tend to be owner-operated and located in the heart of the community. We employ expertise in responsibly retailing many unique products. We take pride in sourcing products and advising our customers on their purchases. Alcohol is our primary product and our members are trained and responsible retailers of alcohol. We hold ourselves to best practice standards in carrying out the sale of alcohol in this country.
NOffLA's members are today operating in a very difficult business environment and, unfortunately, there is a misleading perception that the specialist off-licence trade is doing well because of recent shifts to home consumption. That is not the case. The move to home consumption has not been to the benefit of independent specialist stores. If we take wine as an example, according to Nielson Ireland research, nearly 80% of all wine sold for take-home consumption in Ireland last year was in grocery, convenience and petrol outlets.
NOffLA's members have seen dramatic changes within the drinks industry. The country's economic downturn, coupled with recent ad hoc legislation, often with unintended and unforeseen consequences, have created an environment where too much alcohol can be obtained too cheaply in too many outlets. The legislative environment that has fed this situation includes: the deregulation of off-licencesin Ireland, which has seen a relaxation of licence transfers and a proliferation of ill-trained, non-specialist retailers in convenience stores, petrol stations and supermarkets; the repeal of the groceries orderin March 2006 has had a profound impact on the sale of cheap alcohol because it has allowed the re-introduction of below-cost selling of alcohol; the inconsistent application of planning rules has seen the emphasis shift away from local, independent and specialist main street retailers to edge-of-town supermarkets and chains dominating retail across Ireland; reduced operating hoursmeans that off-licences are now obliged to close at 10 p.m. while all other licensed premises can stay open until midnight and beyond; and the reliance on a voluntary code regarding the separation of alcohol productsand the use of alcohol as a promotional tool, two important points on which I will elaborate in due course.
The irresponsible promotion and sale of cheap alcohol is being used as a driver of footfall into supermarkets, petrol stations and convenience stores and that is ultimately making the survival of many small, family-owned off-licences impossible. This will have lasting socio-economic consequences for many communities around the country as small local retailers are driven out of business. NOffLA's members now find themselves in an unsustainable trading environment. In the past three years alone, 2,600 jobs have been lost in the independent off-licence sector, with average turnover down by between 25% and 50%. We are here today to work with the Government and the committee to find solutions to ensure the sustainability of this important, nationwide, indigenous set of enterprises and employers. We want to ensure the retail and consumption of alcohol is promoted and traded in a responsible manner.
A number of problems exist today in relation to alcohol marketing and the impact that it is having on young people in Ireland. NOffLA members never market to young people. We are community-based and it just would not be tolerated, but it seems there are clear trends among other retailers to reach a youth market, through advertising and positioning. It is our opinion that there are a number of straightforward solutions to current alcohol-related problems. We believe legislation has an essential role to play in addressing the effects of alcohol sales and marketing on societal and health issues. In light of this, NOffLA would like to make the following statement before the committee: voluntary codes of practice do not work for the retail and marketing of alcohol.
At the moment in Ireland there is an unnecessary over-reliance on self-regulation and voluntary codes of practice. It genuinely pains NOffLA to make this statement in the context of the MEAS code of practice. We respect that code and its robust processes and we adhere to it ourselves. However, industry-wide co-operation is lacking. The softer RRAI, mixed trader codes have undermined the MEAS code of practice by allowing mixed traders to adhere to its lesser conditions and by refusing to recognise MEAS's right to handle complaints against the mixed trading sector. Legislation currently exists which was specifically drafted in 2008 to deal with the ill-effects of irresponsible alcohol sales and marketing. NOffLA is not asking the Government to add to its already heavy workload; it simply calls on the Government to end the reliance on voluntary codes of practice and enact legislation which already exists, namely, sections 9 and 16 of the Intoxicating Liquor Act 2008.
Section 9 of the Intoxicating Liquor Act provides for the structural separation of alcohol products from other products in supermarkets, convenience stores, petrol stations and any other licensed premises which are deemed to be mixed trading. At the time of the Act's delivery, the Minister for Justice, Equality and Law Reform, following consultation with some retailers, agreed to defer this section in favour of a voluntary code of practice. The deferral was entirely conditional on the industry code of practice being strictly observed and implemented by the Responsible Retailing of Alcohol in Ireland, RRAI, group which comprises mixed traders. However, what we are now seeing is alcohol being sold in stores beside confectionary, snacks and magazines, which is a direct target to young people. Equally, clever insertion of phrases into the code such as, "as far as possible", negate its proposed intention and allow for constant irresponsible manipulation of the display and sale of alcohol in Ireland. There is nationwide evidence that this code is not being enforced and section 9 must be now enacted.
Section 16 is the second deferred section of the Intoxicating Liquor Act 2008 and makes provision for prohibiting or restricting the use of alcohol as a promotional toolin advertising. At the time of the enactment of the legislation the then Minister for Justice, Equality and Law Reform, also deferred this section and permitted a voluntary code of practice instead. This deferral, much like section 9, is conditional on the voluntary code of practice being strictly implemented and the Minister being satisfied that the same aims are being accomplished. It is apparent, however, that this code is not being implemented in the spirit in which it was intended. The newspapers are awash with cut-price and volume deals of alcohol as the large retailers use alcohol to compete for their grocery market share. It is clear voluntary codes of practice are not suitable vehicles for alcohol control. NOffLA asks the committee how a product included in the national substance misuse strategy could be permitted to be retailed in this manner. Change is needed and the simplest solution is the enactment of the deferred section of the legislation.
The next significant issue is alcohol pricing, a specific topic for discussion at this meeting. The retail price of alcohol which is related to the issue of marketing is a source of serious concern for NOffLA members. NOffLA believes there is one clear solution with two aspects, both of which must work in tandem. First, there must be a minimum pricing mechanism introduced such that deals on cheap alcohol do not result in prices that dip below a statutorily imposed minimum. Second, there must be a ban on below invoice cost selling such that deals promoting heavily discounted below cost branded alcohol to drive footfall to sell other dearer products would be banned. The introduction of minimum pricing would ensure the sale of cheap alcohol, priced at the lowest levels, would cease by establishing base values for its retail price. Minimum pricing would deter the retailing of cheap, obscure brands of alcohol which are gaining in popularity in Ireland. Details and examples can be found in our submission which was circulated prior to the meeting.
The problem of branded drinks being discounted below cost and sold in volume remains. Branded alcohol is, by its very nature, dearer and its lure to the consumer is that it is perceived as a premium product offered at a much lower price or quantity than normal. Only the banning of retailing alcohol at below invoice cost price would take care of this.
Consider the issue of VAT rebates. As it stands, retailers are allowed to reclaim VAT on the losses they incur on products chosen to be sold below cost. Any alcohol sold below cost attracts a VAT refund of 21% from the Government. Banning the retailing of alcohol at below invoice cost price would have the added benefit of preventing retailers from reclaiming on this loss. We call on the Minister for Finance to sign the ministerial order banning below invoice cost selling as soon as possible.
Mandatory identification and mandatory training are of serious concern to NOffLA which is acutely aware of the problems the country faces with regard to underage drinking, as well as the need for retailers to play their part in countering the ill-effects of alcohol, particularly on young people. For 20 years, NOffLA's members have been calling on the Government to introduce mandatory identification for the purchase of all alcohol products, regardless of one's age, as is the case in the United States. This is one of the most effective ways to prevent the sale of alcohol to minors and a critical first step in addressing the problem of under age drinking and alcohol abuse. Alcohol is not like other products; its purchase should be conscious, no matter what age one is.
NOffLA's members have been calling on the Government to introduce mandatory training for any person retailing alcohol. Selling alcohol is very different from selling groceries or petrol and our members are committed to ensuring the retail of alcohol is undertaken in the most responsible manner and controlled environment. Staff who sell alcohol need to not only be fully familiar with current licensing laws but also trained to deal with problematic situations regarding under age purchasing, drunkenness and anti-social behaviour. NOffLA has made costly investments of its membership subscriptions towards developing training that is practical, relevant and accessible. Training is paramount for us. We have trained over 1,000 specialist off-licence employees and, in the past month alone, awarded 155 fully grant-aided training courses to members and their staff.
Each NOffLA member must, as a requirement of membership, undertake the responsible trading in the community, RTC, training programme which has been acknowledged in Ireland as the most positive initiative to promote responsible retailing of alcohol. In addition to being provided with classroom training by our full-time trainer, specialist alcohol retailers have access to a dedicated, interactive e-learning facility delivered directly into our members' outlets. This can lead to a qualification for a responsible trading certificate on completion of an examination. The integrity of the RTC programme is founded on the basis that companies and individuals involved on a day-to-day basis with consumers of alcohol need to make a binding commitment to conduct their trade in the most responsible and professional manner. Alcohol is enjoyed when retailed and consumed in a responsible, mature and appropriate manner and NOffLA recognises the need to work in partnership with the Government to promote responsible consumption in order to reduce alcohol abuse and alcohol-related harm. It is critical that the environment, both legislative and commercial, in which alcohol is sold and consumed be appropriate to the needs of the industry, the consumer and wider society.
Alcohol is not like other grocery products. There are basic common-sense rules that apply to its sale and purchase. We need support from the legislators in the form of a sensible legislative environment allowing responsible alcohol retailers to sell products without the constant fear of getting it wrong. Alcohol is our only product and a failure to adhere to the law means a loss of livelihood. We do not fear legislation; we welcome it.
Our members are proud, responsible retailers with specialist knowledge and expertise. We do not further or promote the misuse of alcohol, nor have we created an environment in which misuse can thrive. Why then are we seeing the reputation of our skilled trade being destroyed, with specialist, responsible retailers becoming an endangered species? We call and will continue to call on the Government to acknowledge the impact on small Irish businesses that pressure from big business interests and irresponsible practices has brought to bear. On behalf of my association, we demand action and call on legislators to adopt common-sense, proactive initiatives such as the mandatory separation of alcohol products, mandatory advertising regulation, minimum pricing, a ban on below cost selling, mandatory training and mandatory identification. As I said, we do not fear legislation; we welcome it. We look forward to answering members' questions.