TAXES on alcohol could be frozen for the second year running as the closure of another nightclub reignites concerns about the future of the Island’s hospitality industry.
ROJO nightclub has announced that it will close after 19 years due to the “ever increasing cost of alcohol”, an “outdated licensing law” and a “general downturn” in footfall after the Covid pandemic.
The government’s plans to raise duty on beer, wine and spirits by 8.9% in 2024 have already come in for heavy criticism – but now local bar and nightclub owners have said the closure of ROJO is an example of elected leaders “misunderstanding the dynamics of the hospitality industry”.
Ministers could now be forced to reconsider the proposed increases, after the Economic and International Affairs Scrutiny Panel yesterday lodged an amendment to the Government Plan designed to freeze import duties on spirits, wine, cider and beer – duties which would see the cost of a pint rise by 50p.
The panel is also requesting Treasury Minister Ian Gorst to bring forward proposals for a separate alcohol duty rate or rebate for the hospitality sector in the future.
The panel – chaired by Deputy Moz Scott – argued that the proposed rises would “impede the growth of, or deplete, the hospitality sector, or indeed lead to business failures”.
Economic Development Minister Kirsten Morel told the JEP yesterday that he was in talks with Deputy Gorst about changes to alcohol duty and would work with the Council of Ministers in the coming year to “bring change as quickly as possible”.
Deputy Morel said: “We need to look at duty and the way that we apply duty on alcohol for on-licence premises. Jersey has become a high-cost place to do business, whether that’s the cost or rent, employing people, complying with regulations. We do need to look at our cost base.”
But, he added: “It’s far too late to make any big changes in this Government Plan, as far as having a duty regime which is much more nuanced than the one we have.
“I’m a champion for cutting red tape and to make sure that government isn’t a reason that businesses don’t start – or that they close down – in Jersey.
“I care deeply about these businesses, but some people in the political world haven’t quite understood how difficult it is for businesses to operate in the Island at the moment because of rising costs, and that’s the message I keep trying to take to my colleagues.
“We are in a moment where it’s becoming more and more difficult to open or run a business in Jersey and that has to change, because if we don’t have an economy that is functioning on all cylinders, then we will see a deterioration in our quality of life over the coming years and that’s not something I want to see.”
St Helier Constable Simon Crowcroft, who was recently appointed Assistant Chief Minister, added that “the constant raising of duty” was a problem for businesses.
He continued: “I know the Council of Ministers are looking at that, and I would certainly approve of an amendment to reduce or freeze the duty, perhaps to put the duty into the off-licence trade instead, because it’s still significantly cheaper to buy alcohol in a supermarket than in a pub, and the controls in a pub are much better.”
Marcus Calvani, co-leader of the Jersey Hospitality Association, said the closure of ROJO was “very sad” but that he was “sadly not shocked”.
He said: “Our industry has a recipe for disaster on its hands. The cost-base increases are out of control and this is not the time to raise duty. The industry is on its knees. We haven’t recovered from Covid yet, and raising these taxes is like pulling the life-plug on the industry.”
Local bar and club owners spoke to the JEP yesterday, reacting with sadness to the news of ROJO’s closure.
In a strongly worded statement on its Facebook page, the nightclub said: “Basically everything is stacked against having a vibrant night-time industry.”
The venue had already clawed back from the brink in 2021 when a crowdfunding campaign was launched to get it through the Covid lockdown.
Martin Sayers, the owner of Quayside and Vittoria, said that the government “clearly does not understand dynamics of how our businesses operate”.
Mr Sayers added; “The swathe of bureaucracy is just overpowering and businesses can’t survive.
“Urgent action needs to be taken, or we won’t have a hospitality industry soon.”
Joao Silvestre, owner of St James’s Wine Bar, said duty increases were making it “impossible” to compete with supermarkets.
The UK Chancellor announced in the recent Autumn statement that UK alcohol duty would be frozen until 1 August next year.
