Commission recommends lower alcohol duty
The Irish drinks trade has welcomed the news from the Commission on Taxation that it is recommend lowering excise duty on alcohol
12 October 2009
Recommendations by the Commission on Taxation that the government lower excise duty on alcohol have been enthusiastically welcomed by drinks companies. Irish Distillers Pernod Ricard has championed a review, given that Irish excise duty on some alcohol is considerably higher than in the UK.
While whiskey attracts excise duty of €39.25 per litre of pure alcohol here, in Britain the equivalent tax is €25.70. Furthermore VAT on drinks in Britain stands at 15% while the Irish rate is 21.5%.
In addition, a recent report by Ernst & Young revealed that the Irish excise duty rate on beer is the fourth highest in Europe and nine times greater than the European average.
The Drinks Industry Group of Ireland (DIGI) has likewise embraced the proposals, in light of the industry’s “exceptionally difficult” year. Last month, Irish Distillers Pernod Ricard reported the Irish spirits market had shrunk by 20% between January and June, and wine sales fell by almost 7.5%. Meanwhile, Diageo and Heineken both indicated beer sales had fallen by between 3% and 4% during the same period.
Cathal McHugh, off-licence owner and spokesman for the National Off-Licence Association (NOffLA) said members had been losing business since last July, when the government introduced new restrictions on off-licence opening hours.
He also claimed off-licences were struggling to compete against northern counterparts, as “prices are as a cheap as they can be given the current legal framework and cost structure.”