Euro-sterling parity could cost Ireland's drinks economy tens of millions in lost revenue as Irish shoppers travel across the border to shop for more affordable prices.
The Drinks Industry Group of Ireland (DIGI) issued the warning following a recent CSO report that said cross-border shopping is contributing to the decline in state revenue,
Over 92,000 people are directly employed by the Irish drinks industry, with a further 210,000 jobs in the hospitality sector.
Through a nationwide network of pubs, hotels, restaurants, off-licences, distilleries, microbreweries, wholesalers and distributors, the drinks industry exports €1.25bn in goods annually and generates €2.3bn of revenue for the Exchequer.
DIGI's latest report estimates that a surge in cross-border shopping could cost the economy as much as €60m before the end of 2017, and losses could continue to grow if sterling continues to drop in value against the euro
Donall O’Keeffe, Secretary at DIGI and Chief Executive, Licensed Vintners Association said the Irish drinks industry is beginning to feel the early effects of Brexit.
“The drinks and hospitality industry is feeling the tremors of Brexit. DIGI predicts that the cross-border shopping surge and decrease in British tourism could cost the Irish economy €130m before the end of the year.
"This is before a Brexit deal is even agreed and discounts many other potential costly factors, including the loss of customers, introduction of tariffs, new trade regulations and border checks.”
Ahead of Budget 2018, DIGI is calling on the Government to enact a number of pro-enterprise measures, including reducing alcohol excise tax by 15%.
Mr O’Keeffe said: “By lowering the financial burden of excise tax, drinks and hospitality businesses will be able to focus on becoming more price competitive, and investing in their products and services. This will allow them to win back cross-border shoppers and entice British tourists to Ireland.
“This Government must prioritise protecting the Irish industries that are disproportionately exposed to Brexit, like drinks and hospitality.”
Ireland’s overall alcohol excise tax is the second highest in the EU.