Tax on life's celebrations: Drinks industry hits out at excise on wine and champagne

Ireland charges more in excise on bottle of wine or champagne than any other European country

Drinks Ireland said the double excise for sparkling wine amounts to a tax on life's celebrations.

A new drinks industry report has highlighted Ireland's continued fondness for wine, despite consumers here spending more on excise than in any other EU country.

The report from Drinks Ireland shows we consumed 8.8m cases of wine last year, a 13% fall from the previous year when the hospitality industry was closed for much of the year, leading to a surge in sales for consumption at home.

Despite the drop, wine comfortably remains the country's second-favourite alcoholic beverage after beer. White wine is the preferred choice, holding 48% of the market, ahead of red wine on 45%, and rosé on 7%.

According to the report, Chile retains the title of the most-favoured country of origin for Irish wine consumers with a 24.3% market share, followed by Spanish and Australian wines. 

While French wines remain the fourth-most popular wine, it was one of the few countries that saw an increase in its market share last year, primarily due to French wine being easier to export to Ireland compared to the logistical challenges that face wine from other markets. 

Largest amount of duty

The report highlights the popularity of the drink despite bottles of wine in Ireland attracting the largest amount of excise duty of all EU countries, adding €3.19 to the price of a standard bottle.

A bottle of wine in Ireland retailing at €9 will see 54% of the price going on Vat and excise, Drinks Ireland said.

Last year, the wine sector contributed €385m in excise to the Exchequer, generating more than €3.5bn from excise in the past decade.

The report states that the €3.19 in excise means Ireland tops the leaderboard among European countries, followed by Finland, which charges €3.16, and the UK, which charges €2.65. However, a number of countries including Italy, Germany, Spain, and Portugal charge no excise on wine.

In Ireland, the first year of the Covid-19 pandemic saw record wine sales as hospitality restrictions led consumers to purchase more beverages in retail outlets. Wine was the primary beneficiary of this new reality, which saw more than 10m cases sold in 2020.

While wine sales held steady in the first quarter of 2021 with some restrictions remaining in place, there were significant falls in sales for the rest of 2021.

"As 'cost of living' issues mount, consumers continue to pay more than their EU counterparts for alcohol," said Jonathan McDade, director of Drinks Ireland.

We are calling for a 15% decrease on excise on wine over the next two budgets.

"For sparkling wine drinkers, the excise hit is doubled, with a rate of €6.37 on a standard bottle. This is effectively a tax on life’s celebrations and special occasions. 

"This disproportionate high level of tax must urgently be addressed at this challenging time," he said.