Fall in alcohol duty ‘will reduce exodus to North’

THE reduction in excise duty on alcohol will go a little way towards reducing the numbers of Republic- based shoppers going North for bargains and will greatly aid Irish retailers, according to the IBEC-affiliated industry representative body, Retail Ireland.

“The retail sector has been in a crisis for the last year, with falling consumer demand and a steep rise in the numbers travelling North to shop. Over 30,000 retailers have lost their jobs and 2010 is set to be another very difficult year. Given this very depressing vista, the budget provides some welcome news,” said Retail Ireland director Torlach Denihan.

“The decision to cut excise duty should help reduce the numbers going North. According to the Commission on Taxation, Irish consumers are subject to among the highest alcohol taxes in Europe and this has been a major factor in encouraging cross-Border shopping.

The transfer of business across the Border has resulted in a loss in revenue to the Exchequer of €190m and 11,000 job losses in the retail sector alone this year. Every 150 cross-Border shopping trips now costs one job and anything that can be done to reduce the number of such trips will help to maintain employment,” he added.

“The minister’s Budget speech acknowledges the difficulties facing the retail sector, the central role played by the devaluation of sterling in causing cross-Border shopping and the extent of tobacco smuggling.

“The Government has finally taken on board the magnitude of the problem, and this was evident at our pre-Budget meeting with Mr Lenihan last month,” said Mr Denihan.

Chambers Ireland, meanwhile, welcomed both the reduction in excise on alcohol and the return in the rate of VAT to 21% from the beginning of next month, adding it now expects “a strong rebound in VAT revenues next year” as a result.

“The Government has recognised the cost of doing business in Ireland is prohibitively high and must come down if Ireland is to restore its competitiveness,” said Chambers chief executive Ian Talbot.


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