From December 1, 2002, the government is to impose a 20 cent levy on every hot beverage single use cup at point of sale, with the tax payable by the person selling the product, i.e. the retailer.

Aiden Roche, a member of the Fed (Federation of Independent Retailers) and owner of the Daybreak store in Co. Dublin, said: “Any price increase is bad for business, especially at a time when the cost of living is rising. This levy is going to push the price of a takeaway coffee over the €3 mark and it is bound to affect sales.

“Reusable cups haven’t really taken off and not many people use them. It’s not going to be good for retail.”

Another Fed member, Tom McDermott from Clonmel, Co. Tipperary, believes the levy is a further burden on retailers.

He said: “From an environmental point of view, I suppose they have to do something, but the tax should be paid at source and not up to individual retailers to collect it and pay it to the government.

“It’s going to create more work in terms of admin for retailers for no return and it’s going to cause confusion at the tills, with people who have a reusable cup paying one price and other customers paying a different price.”

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In a letter to retailers, Newspread blames the price of fuel for the increase in charges, which will apply to invoices from April 17, and says it is a temporary measure that will be removed “once conditions allow”.

The Fed’s Republic of Ireland president Martin Mulligan is sceptical about the reasons for the surcharge. He said: “This is yet another burden on already overburdened retailers.

“The government has already taken 20 cents off the excise duty on fuel, so the price at the pumps has actually gone down. Also, the contractors that Newspread use do not pay the full pump price, as they get a discount from the fuel companies.

“As for the surcharge being temporary, I don’t believe that for a minute, and I would love to see how much they are passing on to their contractors.”

Mr Mulligan’s counterpart in Northern Ireland, Coleraine retailer Joe Archibald, added: “This is totally unjustified. We are all having to absorb extra costs and it’s unfair to expect retailers to cover wholesalers’ costs as well. We can’t add this onto the price of the newspapers, so again we are losing out.”

The Fed has criticised the lack of notice given by Newspread and the fact that, as most Irish retailers are served by two wholesalers, they are forced to pay carriage charges twice.

The Fed’s head of news Brian Murphy said: “We are extremely disappointed with this move by Newspread and we are particularly concerned about the company’s continued refusal to engage with us in meaningful dialogue to find a reasonable solution to this ever increasing concern.

“News wholesalers have to understand that piling extra costs on retailers will result in many of them leaving the market altogether, which in turn will mean swathes of customers being unable to purchase their required read.”

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The publisher has also decided that from September the percentage terms that retailers receive for handling the publication on weekdays and Saturdays will be reduced to 20 per cent. The margin for handling the Sunday edition will be maintained at 20.5 per cent.

Responding to the news, the Fed National President Narinder Randhawa said: “While the cover price increases are welcome, we are disappointed that, once again, the Telegraph is hitting retailers in their pockets with yet another cut to our percentage trading terms.

“Despite repeated conversations with the Telegraph, we are equally dismayed that any ‘improvements’ to our margin payments are being delayed for six months.”

Mr Randhawa added: “Only last month, and at the Fed’s newspaper summit in London, we listened as the Telegraph’s CEO Chris Taylor insisted that the printed word had a bright future as he updated retailers, news wholesaler and his publishing colleagues on its subscription strategy and the importance of our support in achieving that.

“This latest decision to accompany these price increases with a cut in our terms and deferred payment is a bitter blow – especially as they come at a time when our costs are rocketing, and we have no way of passing these increased costs on to our customers.

“This annual cycle of terms cuts and deferred payment needs to stop.  It leaves a sour taste in retailers’ mouths.  We would politely ask Telegraph Media Group to reconsider on both the terms and deferred payment fronts.”

Mr Randhawa continued: “Decisions like these leave me to question my commitment to the news category.  It is time that publishers like TMG understand the precarious financial position that moves such as these make to our members.  It is also time that the Telegraph looks to other categories in our members’ stores that work with us in true partnership.”

The Fed head of news Brian Murphy said: “While many members do support the Telegraph’s subscriptions first strategy, they still have a number of customers who prefer to purchase their newspaper in the more traditional manner.  It is unfair to expect these retailers to wait six months to be paid for this.”

From Monday, in England, Scotland and Wales the weekday cover price will rise by 30p to £2.80; the Saturday newspaper is going up 50p to £3.50p and the cost of the Sunday Telegraph will be £3.00.

In Northern Ireland, weekday editions will cost £3, the Saturday edition is rising a whopping 80p to £3.80 and the Sunday Telegraph will cost £2.70.

In the Republic of Ireland, the cost of both weekday and Saturday editions are rising but the cover price of the Sunday Telegraph will remain at €3.  The new Monday to Friday price will be €3.20, while the Saturday edition is increasing to €4.

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