Retailers have expressed deep concern at Government plans to introduce minimum unit price (MUP) rules for alcohol before similar measures are put in place in Northern Ireland.
Retail Ireland has warned that such a move, without alignment with the North, is likely to lead to a surge in cross-border shopping, with people travelling into Northern Ireland to seek lower prices.
The result of this, the organisation predicts, will be a major loss of sales of not only alcohol but other goods to businesses in the Republic.
“If consumers travel to Northern Ireland to shop, they will inevitably spend money in a wide range of retail and hospitality outlets, not just in grocery and off-trade,” said Retail Ireland director, Arnold Dillon.
“This will be at the expense of struggling businesses here. While retailers in border regions will be hit hardest, we have seen in the past that consumers will travel long distances to save money.
“In the absence of alignment with Northern Ireland, retail businesses in significant swathes of the country could easily find themselves losing out.”
Weekend reports in the Sunday Independent newspaper said the Government is planning to commence within weeks Section 11 of the Public Health Alcohol Act that would set a minimum price of 10c per gram of alcohol.
The move would result in the prices of many cheaper alcohol products increasing, something Retail Ireland said it understands and appreciates the health rationale for.
But it said the Government had previously committed to not introduce MUP until similar rules were introduced in Northern Ireland, something that is not expected to happen until 2023.
The current Programme for Government commits to implementation of MUP “in consultation with Northern Ireland”.
An Ibec report from two years ago estimated that a unilateral MUP move would increase the existing price differential on alcohol between the Republic of Ireland and Northern Ireland from 27% to 38%, resulting in a direct loss to the Irish Exchequer of €94m.
“At a time when we desperately need a strong retail recovery, the Government is contemplating introducing rules that will drive significant volumes of trade north of the border,” Mr Dillon said.
“This would be a major blow to businesses here and will result in a significant loss of tax revenue to the state.”
The Retail Ireland position has been supported by another Ibec sectoral group, Drinks Ireland.
It said the drinks industry favours tackling the sale of cheap alcohol to reduce alcohol misuse.
But it said that while it acknowledges the delays in Northern Ireland in introducing this measure, it believes MUP should be introduced in conjunction with the North, as committed to by the previous Cabinet decision.
A series of questions on the topic sent to the Department of Health on the matter have so far not been responded to.