Saturday, 25 June 2011

Booze, bandits and bollocks - Booz in the Nooz special on the alcohol sales mystery

As Noam Chomsky has said, if you want to find out what big business is doing, listen to it talking to itself. The problem of drinking in Ireland is over, we keep hearing in the national press, because in a recession we aren’t buying so much of it anymore. Pub trade in particular is down and the recession is biting us all.

Cross border trafficing - the road from Newry to Dublin

Not true though, as IBEC Director Kathryn D’Arcy cheerfully announced in Drinks Industry Ireland on 23rd June. Instead there is actually ‘a modest recovery in the alcohol market recorded last year’. “That recovery, on foot of repatriated sales from Northern Ireland, showed an increase of just over five per cent in 2010,” Ms. D’Arcy stated. “However, this was only seen in increased wine and spirits sales in the off-trade. ” So there you have it. A change in the market share, about which there is much bleating and complaining from the losing teams, but overall plenty of drink still around and more besides.

What is interesting behind the stats is the fact that we still don’t have true figures on individual consumption. Independent assessors like Alcohol Action Ireland rely partly on published revenue receipts to give an idea of how much drink is sold, but two things undermine that as a reliable source of info on consumption. Firstly we don’t, as reported before on Gargle Nation, know what the supermarkets are selling because they are, amazingly, not required to tell us.  Secondly, Ireland has its own unique problems of accounting when it comes to two of its biggest problems - emigration and fraud.

Eamon Gilmore tried to tell us last month that record numbers of passport applications (13 per cent higher than last year already, with 5,200 per day setting a new record in May) are a result of a boom in package holidays – a fact uncorroborated by the unhappy fall in profits of the few travel agents still operating in the country. Much more likely of course it is more evidence of the tragic massed emigration set to top 100,000 this year according to the cautious government advisory body the ESRC. And if even this conservative estimate is true, as Cormac O'Sullivan of the Economic and Social Research Institute (ESRI) signalled ‘it will be the worst haemorrhaging of the population in several decades’. It also means that those of us left behind are drinking above our weight , not just to toast absent friends but to drink their share and more besides to achieve that 5% increase in alcohol receipts while the population drastically declines.

If tax revenues are our source of information on the amount of alcohol entering our throats, tax expert Stephen Smith signals a major problem.   Writing in Economic Issues in Alcohol Taxation he tells us that in Ireland ‘alcoholic drinks are particularly heavily taxed, and alcohol taxes are a significant source of public revenues... This diversity of tax treatment creates problems of fiscally induced cross-border shopping and various forms of illegal tax evasion and fiscal fraud’.

Fiscally induced cross border shopping we know about. We are still travelling to the North for a cheaper fix of booze. So much so that, as Drinks Industry Ireland reports, ‘Sainsbury’s and Asda in NI are once again showing growth in the number of shoppers visiting from the Republic, claims Kantar Worldpanel whose figures for the 12 weeks to October 3rd (2010) indicate that the two NI multiples were responsible for taking 2.1 per cent of the total €9 billion RoI take-home grocery market in the quarter’. Just to do the sums, that is 189 million pounds worth of booze making its way across the border into the Republic last year, or 756,000,000 cans of Sainsbury’s lager, or about 250 cans for each adult.  Add to that the many similar ‘booze boat’ trips from Dublin to Liverpool and back each week, and it makes a significant addition to the pool of untaxed and unrecorded boozing this side of the border and the Irish Sea.

And what of the ‘illegal tax evasion and fiscal fraud’?  It goes both ways as they say.  Alcohol manufactured abroad is good to sell in Ireland because the price is relatively high.  There have been efforts to identify this tax free trafficking such as Operation Flatmate reported in the House of Commons in July 2008. ‘As part of a joint operation with Republic of Ireland Customs, HMRC Criminal Investigation Officers visited storage premises South of Newry and discovered 2,000 bottles of wine. The wine was seized as it had been illegally diverted from a bonded warehouse and as such was not duty paid alcohol’. This investigation was apparently part of ‘an €1 million, EU-wide excise duty and VAT fraud investigation’.

Meanwhile, fraudulently selling abroad without paying high taxes is apparently attractive to some Irish alcohol manufacturers, who nevertheless remained nameless in a Drinks Industry bulletin in May. ‘Some 44,276 litres of alcohol were seized during 2010 in 287different raids worth a total of €600,000’ the bulletin reports, quoting the Revenue Commissioners annual report. In addition to 26 convictions for alcohol smuggling last year and six convictions in relation to counterfeit spirits, Revenue also identified ‘an alcohol diversion fraud relating to movements of duty-suspended alcohol from Ireland to Spain and Romania’.

The figures and names are not disclosed, but it's not three guys in a minivan by the sound of it, because they have hired lawyers and the case is stuck in the legal process like so many other fraud cases in Ireland. As the report concludes, ‘this assessment has been appealed and is currently in the appeals process’. Sadly, we’ve heard it all before.

Read more booz in the nooz here

Thursday, 16 June 2011

Alex Salmond and the Irish Examiner declare war on booze (& bigotry). Will vested interests and hypocrisy bring them down?

Alex Salmond, Scotland’s First Minister, was interviewed on BBC radio’s Woman’s Hour (10th June) about his ‘clear mandate’ to tackle the problems of ‘booze and bigotry’. Setting out his agenda for government he told the Scottish Parliament
"We have confused our appetite for fun with a hunger for self destruction. We have tolerated a race to the bottom of the bottle which has ruined our health, our judgment our relationships, our safety and our dignity".
Chiefly, he wants minimum pricing which most experts agree is the only way to address the crisis of rocketing booze consumption. Supermarkets in particular are selling alcohol, as Salmond says, ‘literally cheaper than water’.

Alex Salmond: war on bigotry and booze

Ireland, like Scotland, is drinking above its weight (20% higher than the EU average) and like Salmond, the Gardai in County Waterford are fighting the good fight. Their recent ‘Glasses’ seminar focused on ‘public order problems caused by people who had consumed too much alcohol’ to ‘increase awareness among those serving alcohol of the negative consequences’. Talking to The Irish Examiner, Garda liaison officer Sergeant Andrew Geary said he was ‘extremely heartened by the interest shown by publicans who were paying for the seminar themselves and in many cases bringing several of their staff’. 

Last but not least, the Irish Examiner banged the drum  loudly with a special May 6th 20-page supplement on the problems of excessive boozing in Ireland. Taking billboard space across the land showing a drunken Kathleen Ni Houlihan, the paper sternly editorialised to the nation: ‘Control your relationship with drink’! The reason was made clear: ‘Alcohol… has done more harm to Irish people, Irish families, Irish relationships and businesses, Irish talent and potential, Irish hopes and ambitions than a combination of all the other slings and arrows life can throw at us’. All good then.

The battle is set, the charge has been sounded, the cavalry are on the way.
But over the hill instead come the alcohol industry, in defence of their profits. 'It’s a recession' they cry! 'You need us for jobs!' In Ireland, the Irish Brewer’s Association annual report tells the story. There is an ‘unfortunate … continuing decline of the pub sector’ and their report says that to protect jobs we must ‘encourage people back into the great Irish pub and to protect the domestic market”. Surprisingly, all trace of the paper's earlier concern for national harm gone, the Irish Examiner rehashes the IBA press release  almost verbatim as an article.  ‘We already know that the pub trade has lost a quarter of its business in the last few years, and this has had a subsequent impact on beer sales’, the ‘good news’ being that ‘Ireland now drinks much less than countries like the Czech Republic and Germany’.

This is a misleading reading of the data. There are increased alcohol sales in supermarkets and garages across Ireland and increased consumption of high strength wine (26% of the total market) and lager (60% of the beer market) in particular, as the IBA report tells us. Irish based Diageo, for example, is enjoying a steady rise in profits world-wide and as CNN reported  last week, the ‘alcohol industry maintained 10% growth throughout the recession, including retailers, wholesalers and bars. Health care was the only other industry to maintain growth through the recession. "Other than going to the doctor, [alcohol] is another need to have."’. It is in fact just the Irish pub trade that is down. [My emphasis]

So what’s wrong with Irish pubs? Many Irish publicans have nobody to blame but themselves. Soft drinks are overpriced, little attention has been paid to diversity and the creation of a café-style, family-friendly atmosphere, and booze prices are kept high by a tight manufacturer’s monopoly on distribution. The industry is wallowing in fond memories of the days of pints of the black stuff lined up for the boys at the bar (joined lately by none other than Barrack O’Bama). Consequently cash-strapped Irish consumers, women and teenagers seeking their ‘need to have’ alcohol are turning instead to the cheaper and more accessible supermarkets and garages. So while we may be drinking less beer than the Germans, we are certainly not drinking less alcohol.  Ireland, according to the IBA report, still manufactures more beer than before (exports up 2%), so we need not worry, as the Examiner does, about any threat to the beer industry’s investment of ‘more than €100m in Irish agricultural products’ and support for ‘over 3,000 farming families’.

What of the heroes of Waterford, those publicans praised by Gardai for attending the alcohol abuse seminar? Well they played a significant role in defending the boozing culture by keeping affordable soft drinks off the bar menu. A Dublin campaign to reduce the price of soft drinks and to broaden the appeal of pubs to non-drinkers received the support of the Dublin based Licensed Vintners of Ireland. But the Waterford Vintners objected. “If it came to the Waterford branch of the VFI being asked to do this, I’m not sure we could support it,” said Michael Fitzgerald, of The Munster Bar. “By law, publicans can’t be made to charge certain prices. I’m not even sure that advising them to do so is any different.” And so the campaign failed.

Heroin vs Alcohol
How then did these same vintners react to news of the problems of alcoholabuse at the ‘Glasses’ seminar organised by the Gardai?  Beer mats were the answer. Nasty spills on the table were not the target though. These beer mats are to encourage customers to tackle their heroin habit. John McGrath of Dungarvan Vintners Association announced that ‘The beer mats would provide easy-to-understand information. On one side there will be drugs information and on the reverse will be the details of the local community drugs worker Tracy Nugent from the Waterford Community Drugs Initiative’. That’s it.

Waterford does have a problem with heroin and an effort to tackle it is worthy. In 2009 the city treated the country’s second highest number of heroin casualties outside of Dublin, but is still waiting for an HSE funded unit to tackle the problem.  As the Munster Express reported, while ‘heroin was cited as the main substance abused in 12.9 per cent of all treated clients’ and ‘the numbers being treated for heroin abuse in Waterford last year came in higher than both the recorded national (11.4) and regional averages (12.5).  Alcohol remains by far and away the most widely abused substance, accounting for 325 treated clients, or 62.9 per cent of the 558 persons who were treated by the HSE in Waterford last year’.  [My emphasis]

While the beer mat plan earned the publicans some worthy column space in The Irish Examiner, which headlined without irony ‘Publicans to help combat heroin use’, nowhere was the greater problem of alcohol abuse mentioned. Given that the industry makes 50% of its profit from the 20% who are alcoholic, a few mats with alcohol advice wouldn’t have gone astray. Perhaps the drug dealers have that covered?

Back to Alex Salmond and the campaign to introduce minimum pricing in his war on booze. He doesn’t have the Waterford Vintners to deal with, but the self-interest and hypocrisy of some Members of the Scottish Parliament has been more than enough to scuttle his campaign too. For example, Murdo Fraser, Deputy Leader of the Scottish Conservatives, reached for some higher principles to justify his opposition to the worthy cause. "SNP plans for indiscriminate blanket minimum pricing would penalise responsible drinkers, harm the Scotch whisky industry, cost jobs and are illegal" he said.  As the Telegraph reported, he was joined by Mike Rumbles, Scottish Liberal Democrat Chief Whip, who said:
“I made it absolutely clear that the Government's alcohol strategy faced certain defeat unless they brought these proposals forward properly. They need to let MSPs scrutinise fully and vote on controversial measures like minimum pricing, which could have a devastating impact on the whisky industry. It is absolutely clear that if they continue trying to sneak through these measures then the entire package would be dead in the water."
So dead in the water it is, with the legislation now needlessly shelved for another year awaiting no doubt more salvoes of hypocrisy and self-interest if it should surface again. The war on booze culture is suffering defeats on both sides of the Irish Sea.

'Dribbling Incoherents'
That just leaves the Examiner’s rallying cry to bring the scattered troops back to the fight. On 6th May it trumpeted that alcohol misuse is ‘more insidious and corrosive than nearly any other human activity’ leaving every generation with ‘fine lives and talents publicly turned into sullen, dribbling incoherents’. But that was May. Since then the paper's generous reporting of the IBA report and the Waterford vintners ( in the interests of balance and fairness?) was joined by half a dozen or more ‘stories’ featuring the real national hero – the publican. For those of us who clearly misunderstood the earlier editorial about alcohol, the paper patiently spells it out carefully. ‘Even if we have become more alert to the threat of alcohol’ the editor explains on June 2nd ‘it would be a tragedy for our culture, a culture that so celebrates social interaction, if we continue to lose local pubs’.

Why does the Irish Examiner believe, and repeatedly argue, that 'community' is synonymous with boozing? Because apparently ‘the pubs of Ireland played a huge role in the lives of so many of us. It was where we met acquaintances and turned fleeting relationships into lifelong friendships; it is where the kernels of great community ideas were first aired and later consolidated. It is where many of us met our partners’. Other countries have parliaments, town councils, civic groups, cafés and many other social forums that serve these needs.  There seems in the Examiner’s imagination to be not just no alternative to the boozing culture, but no worhtwhile culture that is not rooted in the pub. Are we doomed?

In case we were still missing the point, on 4th June another editorial came along just in time for the bank holiday - the traditional occasion for booze-related social mayhem and carange on the roads. ‘It has become standard practice to mark the arrival of a holiday weekend with all sorts of dire warnings about what might befall us’ the paper tells us, by now forgetting exactly who we heard that from first.  Foolishly repeating those same dire warnings in the wake of 67 road deaths this year already, the Garda campaign  ‘Heed the warnings, Stop the carnage” quotes Assistant Commissoner Twomey who says “It is somewhat disappointing that in spite of all the campaigns and sustained efforts in relation to the dangers of ‘drink driving’ and speeding, drivers persist in taking chances - chances with their own life and all others that they meet on the road”. Well thankfully that no longer applies, according to the Examiner. ‘Life is best lived with vigour and enthusiasm, a sense of adventure and possibility. Maybe we need to be a bit less Nanny State and a bit more "give it a lash". Indeed.