Drinks industry lobbied to get alcohol tax cut in last budget

THE drinks industry lobbied the Government ahead of last December’s budget to reduce the tax on alcohol, the Tax Strategy Group papers reveal.

Excises on beer and wine have remained unchanged since 1994, while those on cider and spirits were increased in December 2001 and 2002 respectively.

However, despite the fact there have been so few increases, Ireland has the highest rates of excise for still and sparkling wine and the second highest for spirits and beer.

Because of this, the drinks industry pushed for a reduction in excises on alcohol.

“A pre-budget submission from the Drinks Industry Group of Ireland seeks ‘no increase in alcohol taxation in 2008’ and states that ‘over the medium term... the gap between alcohol taxation in Ireland and most other EU economies will have to be narrowed’,” the papers state.

However, the Tax Strategy Group noted that it would cost close to €110 million a year if Irish excise rates were to be brought into line with British rates [Britain having the rates nearest to our own within the EU].

In the event, the then finance minister Brian Cowen neither increased nor decreased the excises on alcohol in the budget.

The papers also note the opposition of the drinks industry to proposals to raise alcohol excises on health grounds.

“From a health perspective, the second report of the Strategic Task Force on Alcohol [September 2004] recommended that excise duty on alcohol be increased ‘with a view to reducing overall consumption and related harm’, but the preferred level of increases were not specified,” the papers stated.

“The Drinks Industry Group, however, have previously stated that tackling alcohol abuse through high excise rates is not the appropriate policy response to this problem.”