‘Reverse hike in alcohol excise’

The main representative body for the drinks industry has called for a reversal of last year’s excise increase on alcohol to be made in next month’s budget.

Tue, 24 Sep, 2013 - 01:00

Geoff Percival

Any increase, the Drinks Industry Group of Ireland warned yesterday, will fail to generate the tax revenues Government is hoping for and will place further pressure on the industry.

Speaking at the launch of a report outlining the economic contribution of the sector, chairman, Peter O’Brien, said last year’s excise increase has added “substantial hardship to an industry that is already under considerable pressure”.

“In the manufacturing sector there has been a drop in employment levels from 6,146 in 2000, to 3,605 in 2011. In the on and off-trade, there has been a substantial decline in the level of retail employees in recent years. According to the Annual Services Inquiry of the CSO, 6,000 jobs were lost between 2008 and 2011,” he added.

The Drinks Industry Group of Ireland’s latest report, written by Tony Foley of Dublin City University Business School, shows that while the drinks sector still makes a substantial contribution to the economy — over €2bn in Vat and excise receipts and over €1bn in annual exports — that contribution has dwindled since 2008.

Roughly 1,000 pubs have closed in the past five years, with the amount of consumer spending on alcohol — outside of the retail multiples — falling by around €1bn.

The group wants the Government to establish a task force (a request which has fallen on deaf ears before) to recognise the problem and try to produce solutions.

But, while the Licensed Vintners Association wants the 9% Vat rate for the hospitality sector maintained, it seems likely that Mr Noonan will return it to the 13.5% rate, which had been cut two years ago in order to stimulate the sector.

“A key conclusion is the 62,000 people who get full or part-time employment from the industry. With these findings in mind, it’s logical that the Government should seek to support this sector, in whatever way it can,” Tony Foley said yesterday.