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Irish drinks industry calls for excise tax reduction
The Drinks Industry Group of Ireland (DIGI) is urging the government to reduce excise tax on spirits by 15% as a “vital response” to uncertainty caused by Brexit.
DIGI is urging the government to reduce excise tax on spirits by 15%In its pre-budget submission the group – which represents drinks suppliers, pubs, hotels, independent off-licences and restaurants in Ireland – calls on the government to make “every possible effort” to compensate for the negative effects of Brexit, including exchange rate uncertainty, impacts of a new border and the consequences Brexit might have on British tourists and their spend in Ireland.
This includes “taking control” of so-called ‘domestic determinants’ that can support economic growth after the Brexit vote, including excise tax.
Maggie Timoney, DIGI chairperson and managing director at Heineken Ireland, says alcohol tax is “a regressive and inequitable tax”.
She said: “An alcohol excise reduction is a vital response to the new and immediate effect of the uncertainty caused by Brexit. Excise increases are detrimental to the Irish drinks and hospitality industry and the 200,000 jobs it supports.
“Ireland has the second highest excise on alcohol in the EU. We believe that the particularly high Irish excise tax is detrimental to economic growth and economic activity.”
Ireland received 3.5 million visitors from the British market in 2015, generating more than €1 billion in tourism revenue; while in the first quarter of 2016, spend associated with visits from Briton grew by more than 18%.
According to a 2014 Failte Ireland Survey, the “experience of the Irish pub” was cited as the number one influencer in encouraging overseas visitors to come to Ireland. Additionally “listening to Irish music in a pub” was the number one cited activity by visiting tourists.
For this reason, DIGI believes that the Brexit vote has resulted in an “even stronger case” for a reduction in alcohol excise.
The group also believes the 15% dip will help to create a “solid domestic market” which will in turn bolster drinks exports; and “support the commercial viability of drinks related enterprises” in both the on- and off-trade, improving business and consumer confidence.
Earlier this month, DIGI claimed that high alcohol tax in Ireland means it is now cheaper to purchase Irish whiskey in the US than in its native market.