Irish Budget ‘undermines’ drinks sector recovery

Ireland’s drinks industry has criticised the government’s decision not to reduce alcohol excise tax in its latest Budget, calling it a “missed opportunity”.

The Drinks Industry Group of Ireland (DIGI) has criticised the Irish government’s decision not to lower alcohol excise tax

Announced by the Republic of Ireland’s finance minister Michael Noonan yesterday (13 October), the Budget contained €1.5 billion of tax cuts and spending increases, but alcohol duty was left unchanged.

According to new statistics by Eurostat, consumers in Ireland pay 70% more than the European average for alcoholic drinks, largely due to high taxation.

The country has the highest rate of excise tax on spirits and beer in the EU and the highest excise tax on wine.

“The drink and hospitality sector supports 92,000 jobs from grain to glass,” said Peter O’Brien, chair of the Drinks Industry Group of Ireland (DIGI), a trade body representing suppliers, pubs, restaurants, hotels and independent off-licences.

“An excise reduction would have supported growth: the industry purchases €1.1billion worth of Irish inputs, supporting jobs on farms across Ireland and makes a €2bn wage contribution to the Irish economy.

“An excise cut would also support small businesses and jobs in local towns and villages. There are currently an array of drinks manufacturers and suppliers attempting to enter the Irish market, including 23 whiskey distillers and numerous craft brewers.”

O’Brien added that an excise reduction would have boosted tourism in Ireland, and that the industry needs to be brought in line with other European taxation measures.

“We hope that the government that delivers Budget 2017 will realise the full potential of the sector and reduce the extortionate excise levels that is undermining the recovery of this industry,” he added.

Despite expressing disappointment over the unchanged excise, the DIGI has welcomed the Budget’s excise relief for micro-breweries.