Vintners surprised at drinks increase

Reacting to Mr McCreevy's Budget today, Tadgh O'Sullivan of the Vintners Association insists that Ireland has enough tax on alcohol at the moment.

He says that he is disappointed at the fact that areas of the drinks industry that are already taxed are now being raised.

He says they are incomparable with Europe.

This will affect customers and sales according to the Vintners Association spokesperson.

The Federation says it was a regressive measure which further cements Ireland's position as one of the most expensive countries in Europe to purchase alcohol.

Joe Browne, president of the VFI, which represents 6,000 publicans outside the Dublin area, said that even an initial step forward in harmonising Ireland's tax regime with other EU members states would have made basic common sense.

"We realise that this is a difficult fiscal year for the Government, but increasing excise duty on alcohol merely serves to increase inflation and decrease our competitiveness which is already a serious issue, particularly for the tourism industry," he said.

"Ireland has the 5th highest tax on spirits, 2nd highest tax on wine and 2nd highest tax on beer. Seven of the 15 EU member states have no tax on wine whatsoever.

"Our VAT rate of 21% is the fourth highest in Europe, compared with for example, Luxembourg at 15% and Spain at 16%. Irish rates of duty are in some cases 50 times higher than our competitors in Europe and VAT must be paid on top of excise duty," he said.