How To Destroy Innovation Again

Quick update. Since I posted this the reality is now around the corner. Read what PJ has to say. https://www.thetimes.co.uk/article/gunpowder-gin-boss-blows-up-at-cancer-labels-zrh5x3skg.

Most alcohol brands sold in duty-free stores may pull out of the Irish market due to radical plans over sales and advertising, a trade body has warned.

Frank O’Connell, president of the Duty Free World Council (DFWC), said that retail choice should not be restricted for Ireland’s international travellers as a result of the Public Health (Alcohol) Bill.

Dublin Airport Authority (DAA) has also warned of “competitive disadvantage” from the plans, which propose rules on minimum pricing, advertising and health hazard labelling, including cancer warnings.

It passed through the Seanad last month and is due to be debated in the Dáil in the coming weeks.

“The legislation goes further than anything we operate under within the EU and across the world,” Mr O’Connell told The Times.

The law would compel companies to make two different labels, one for Irish duty-free stores and one for the rest of the world. It stipulates that health hazard labels need to take up one third of a label.

“Most of the alcohol products sold in Irish airports are destined exclusively for the global duty-free and travel retail market,” he said. “The cost of producing specific Irish-compliant products for a manufacturer who sells small volumes of their product in Irish airports will be too much to warrant a continuance of supply.”

Mr O’Connell said the DFWC estimated that over three quarters of the brands it sells could be at risk, including champagne, gin, American bourbon and other foreign spirits. He said both the cost of compliance and reputational damage were forcing many companies to consider abandoning the Irish duty-free market.

The European Travel Retail Confederation, which represents European-based duty-free stores, wrote to Leo Varadkar, then the minister for health, in 2015 warning against the bill. It threatened that many brands would pull out of the market, especially with the requirement for labelling to be in English and Irish.

It also said that duty-free sales offered companies a unique opportunity to create products not normally sold in domestic markets.

“Requiring on-the-pack labelling for such unique products would result in them being removed from shops at Irish airports as the cost of producing national language labelling on packaging for such limited edition items would be prohibitive,” a letter released under freedom of information stated.

During the Seanad debate, a number of politicians called for an airport sales exemption to the bill.

Simon Harris, the health minister, rejected this and said that Ireland needed to “show leadership” on the issue of alcohol legislation.

A spokesman for DAA, which owns and operates both Dublin and Cork airports, said he still hoped that there would be an exemption for airports.

“The proposed legislation will leave the Irish travel retail sector at a competitive disadvantage to other European countries and on that basis we have regularly raised our concerns about the impact of the bill with key stakeholders,” the spokesman said.

The DFWC also wrote to Mr Varadkar in 2015 to stress its concerns over the bill.

“Airport duty-free stores target a different customer base to that of the domestic retail trade serving international travellers, many of whom may not understand English,” it said.