Should it go ahead, this will set a floor price under which no alcohol can be retailed.
But according to NOffLA, “While it is not yet clear what unit will be used, it is believed it will come within the (€0.90-€1.10) band”.
Using the middle pricing mechanism of €1.00 per 10 units of alcohol, NOffLA has calculated the tabulation of prices below.
|Product||% Alcohol||€1 MUP per 10 grams||Excise + Vat||Balance for production & margin|
And NOffLA points out that due to the high levels of excise, most of the MUP will constitute excise plus VAT.
“With a small balance remaining for the actual cost of manufacture, distribution and retail of the product” states the Association, “it’s evident that (a) premium alcohol will continue to be sold at heavily-discounted below-cost levels and that (b) the only alcohol retailing at invoice cost or above at these margins will be of inferior quality.
“To generate market share using minimum price, we predict retailers will amplify their scale of below-invoice cost selling and the acquisition of counterfeit goods.”
NOffLA’s Government Affairs Director Evelyn Jones points out that 30% of all wine sold here in 2013 had a value of 11 Cent in the bottle and 90% of all wine sold in 2013 had wine in the bottle valued at €1.77 or less.
In order to reduce the likelihood of inferior alcohol being offered for sale as well as and increase in below-cost invoice selling, NOffLA has urged that consideration be given to the need to reduce excise when existing duties are looked at in the context of MUP.