Tax now €17 of €20 bottle of vodka – ABFI

“The Minister emphasised the importance of the agri-food industry to our domestic recovery, and then imposed a series of punitive excise increases on a vital aspect of this industry” – ABFI Director Kathryn D’Arcy.

The Alcohol Beverage Federation of Ireland has stated that a second consecutive year of penal excise increases on beer, wine and spirits as announced in Budget 2014 will see €17 in tax paid to the Government on a €20 bottle of vodka and a €24 bottle of whiskey.

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“This accounts for 70% of the price of a bottle of whiskey and 80% of the price of a bottle of vodka,” stated ABFI’s Director Kathryn D’Arcy, “Since 2012, the Government has increased the price of tax paid on a bottle of spirits by almost €4, as a result of the VAT increase in 2012 and the excise increases in Budget 2013 and Budget 2014.
 
“The decision to increase indirect taxes through huge excise increases is short-sighted and will damage employment across the industry. The Minister emphasised the importance of the agri-food industry to our domestic recovery, and then imposed a series of punitive excise increases on a vital aspect of this industry.
 
“The effects of an 18% increase in excise on beer will be felt by Irish farmers; the 15% increase in excise on spirits will damage Ireland’s export sector and the 15% increase in excise on wine will damage our international competitiveness as a tourism location.
 
“Prior to the second consecutive excise hike in as many years, a basket of alcohol products was already over 30% cheaper in Northern Ireland. Another consequence of the excise increases will be resumption in cross-border shopping as a result of the price differentials on alcohol products in the Republic when compared with Northern Ireland.
 
“Additionally, as a result of the penal excise increase, illegal alcohol trade will also continue to rise. Last year’s excise increase resulted in revenue seizing 3.5 times more illegal alcohol in the first seven months of 2013 than it did in all of last year. High excise rates encourage illegal alcohol trade; the 15–18% increase in excise will further motivate illegal practice.”

Kathryn D’Arcy concluded, “Last year’s excise increase did not yield the returns expected and has served only to damage the ability of the industry to trade efficiently both domestically and internationally. Government should be doing everything in its power to support this important indigenous industry, rather than levelling punitive excise increases at manufacturers and suppliers.”

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