Ireland’s drinks industry creates five-point ‘Brexit plan’

The Drinks Industry Group of Ireland (DIGI) has recommended a five-policy strategy to the government ahead of the 2018 Budget, which includes the establishment of regional ‘Brexit hubs’ for rural businesses.

The Drinks Industry Group of Ireland has recommended a five-policy strategy to the Irish Government ahead of what is has dubbed the ‘Brexit Budget’

The organisation is calling on the government to commit to five key policy changes and initiatives, which include reducing excise tax by 15%, maintaining the 9% VAT rat for the hospitality industry, and securing EU funds to protect Irish drinks and tourism businesses.

The strategy also includes the creation of regional ‘Brexit hubs’, which it says will “provide support and highlight specific local issues” faced by rural drinks and hospitality businesses, as well as a ‘Brexit Business Board’ to develop national plans and initiatives for business cost reductions.

DIGI’s recommendations come following its latest report, The Economic Impact of Brexit on the Drinks and Hospitality Sectors, which revealed that Ireland would lose out on almost €70 million (US$83.8m) in tourism revenue this year if current trends continue.

Cross-border shopping is also on the rise, the body said, and could cost Irish drinks businesses €60 million this year as Republic of Ireland shoppers cross the border to buy cheaper alcohol.

In Q3 2016 – the latest data available – the number of Republic of Ireland-registered cars in a sample of Northern Ireland shopping centres was 56.3%, the highest since Q4 2009.

Donall O’Keeffe, secretary of DIGI and chief executive of the Licensed Vintners Association (LVA), said: “Ireland has already felt the tremors of Brexit. Our new report estimates that if trends in British tourism and cross-border shopping continue, perpetuated by a devalued sterling, Irish drinks and hospitality businesses could lose as much as €130 million this year alone.

“If the UK leaves the EU without a deal and a hard Brexit occurs, this cost will be much more significant. In addition to less tourism spend and more cross-border shopping, Irish drinks exporters will be subject to tariffs, new regulations, border checks and a smaller UK market, all of which will lead to massive administrative expenditure that could easily sink some smaller SMEs in our industry.”

As such, DIGI is “strongly urging” the Irish government to approve “pro-enterprise, pro-growth” measures to safeguard the country’s drinks and hospitality sectors.

“Many of DIGI’s recommendations can be put into action immediately, like reducing excise tax,” O’Keeffe continued.

“Ireland’s punitive excise tax, the second highest in the EU, makes our drinks and hospitality businesses less competitive, particularly for British tourists with weaker sterling and Irish shoppers drawn across the border for more affordable alcohol products.

“DIGI believes that closer collaboration and cooperation between businesses, representative bodies and the government, through local Brexit hubs and a national Brexit Business Board, will create real solutions that help drinks and hospitality businesses weather the coming Brexit storm and grow into a post-Brexit future.”