Rise in wine duty 'will not increase Exchequer yields'

The Irish Wine Association, while recognising the difficult circumstances facing the Minister, has expressed disappointment at the 25% increase in excise duty on wine announced in today’s Budget.

Ireland has the highest excise on wine in the EU and this tax hike will not result in increased yields for the Exchequer, according to Aoife Clarke, Senior Executive with the Irish Wine Association.

Ms Clarke said: "We have already seen consumers choosing to travel to Northern Ireland where they can purchase alcohol more cheaply. One in six households in the Republic went to the North to shop over the summer, with alcohol representing a significant part of the savings to be made.

"Today’s announcement makes the savings to be found north of the border even greater and the negative impact on VAT and excise revenue will be heightened.

"The Budget comes after a recent slump in wine consumption. The Government’s own figures show that excise receipts from wine fell by 11% in August 2008 compared to the same month last year and by 17% in September. So far this year, consumption is down 6% and 2008 is likely to see a total fall of over 8%.

"Wine is now enjoyed by all sections of the population and this increase will have a negative impact upon already cash strapped households."

Rosemary Garth from the Alcohol Beverage Association of Ireland (ABFI), of which the IWA is a member, said: "Specifically targeting one category of alcohol is unfair and we believe that any fundamental changes on excise tax should be dealt with under the Commission of Taxation."

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