Drinks industry makes final call ahead of Budget 2019

The ABFI has met with a group from the EU to further shore up Ireland and Northern Ireland's exposure after March
The ABFI has met with a group from the EU to further shore up Ireland and Northern Ireland's exposure after March

Ahead of tomorrow's Budget announcment, the Drinks Industry Group of Ireland has called on the government to reduce excise tax on alcohol products, in order to support the drinks and hospitality industry ahead of a potential "no-deal Brexit".

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8 October 2018 | 0

A reduction in excise tax on alcohol in Budget 2019 is the Government’s only chance to provide tangible and immediate support to Ireland’s drinks and hospitality businesses before Brexit takes place next year. This is the final word of the Drinks Industry Group of Ireland (DIGI) ahead of Budget 2019.

The group said that a hard or no deal Brexit, one that restricts established trade routes, levies additional duties or tariffs on goods, or sends sterling on another steep decline, will have significant consequences for Ireland’s drinks and hospitality businesses, particularly those in rural parts of the country

The DIGI points out that the UK is Ireland’s single largest tourism market. If sterling declines again as a result of a hard or no deal Brexit, British tourists are far more likely to remain at home or spend less if they do visit Ireland. If and when this happens, employment in the drinks and hospitality industry will be under threat.

In terms of employment in the ‘accommodation and food service’ sector, nine counties report a total employment share above the country average of 5.8%.  Six counties are part of Ireland’s Wild Atlantic Way; in Kerry, the employment share is a formidable 10.5%.

Meanwhile, a significant portion of Ireland’s drinks exports are heavily dependent on the UK. More than 70% of all cider exports and 43% of all beer exports are to the British market. Steeper UK levies, waits at the border, and other costly barriers will eat into the margins of smaller producers, in many cases to an unsustainable degree.

DIGI estimates that a hard Brexit impact on the drinks and hospitality industry alone could cost the Exchequer much as €135 million in lost revenue, due to a decrease in tourism, reduced access to the British market, and an increase in cross-border shopping.

Rosemary Garth, Chair of DIGI and Director of Communications at Irish Distillers, said a no deal Brexit scenario will cause severe problems for Ireland’s UK-dependent drinks and hospitality industry. “If the Government does not pursue an active ‘defence policy’ for the drinks and hospitality industry in Budget 2019,” Garth said, “then the Exchequer could lose out on as much as €135 million in revenue.

“In rural Ireland, where the industry is often the primary or major employer, failure to provide defence against the worst effects of Brexit could lead to job losses, business closures and the shrinking of local economies.  At best, one of Ireland’s fastest-growing industries will simply stagnate.”

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