Ireland's high rate of tax is making Irish produced drink more expensive to buy here than it is abroad, according to a report from the Drinks Industry Group of Ireland (DIGI).
The study, led by Dublin City University (DCU) economist Anthony Foley, examined alcohol tax rates in EU countries and the UK, finding Ireland to have the second highest overall rate among the 28 countries included.
Second only to Finland, Ireland's excise duty is "making us a far more expensive place to visit compared to other European countries," according to the chair of DIGI and corporate relations director at Diageo Ireland, Liam Reid.
He added the rates are forcing hospitality and drinks businesses, particularly small exporting breweries and distilleries, to make "growth-limiting sacrifices".
Ireland has the second-highest overall excise tax rate in the EU and UK.
It is DIGI’s recommendation that the Government reduce excise tax on beer, cider, wine & spirits by 7.5% in October’s Budget.
Read the report: https://t.co/Qu2Xtvn353@MichealMartinTD@Paschald@LeoVaradkar pic.twitter.com/uaLgJVnsToAdvertisement
— Drinks Industry Group of Ireland (@DIGI_Ireland) September 6, 2021
The research found that a 70cl bottle of Irish whiskey sold at an off-licence in Ireland is levied with an excise tax of €11.92, compared to an excise tax of just €2.90 for the same bottle sold in an off-licence in Italy.
"The Irish government takes approximately a third of the price of every drink purchased by a customer in a hospitality environment, money that could otherwise be invested by the business in maintaining employment, new staff, new premises, new technology, and new products and services," Mr Reid said.
"The French and German governments, as well as many others in Western Europe, such as Italy and Spain, recognise that their drinks industries are major employers, generate huge amounts of revenue for the economy through export and tourism, and are central to local communities and national heritage and culture," he added.
Wine, beer and spirits
While Finland has the highest overall excise tax for alcohol, calculated on the average rates for wine, beer and spirits, the breakdown of figures show Ireland has the highest excise rate for wine (80c per glass), the second highest rate for beer (55c per pint of larger), and the third highest for spirits (60c per glass of whiskey).
The report also states that 15 countries included in the study do not charge any excise tax on wine, including major producers, Italy and Spain.
In response to the data, DIGI called for the Government to reduce excise duties on beer, cider, wine and spirits by 7.5 per cent in October's budget, "beginning a process to bring Ireland's rates into line with other European countries".
The group believes the benefits would be felt immediately by the "thousands of hospitality businesses across Ireland and their combined hundreds of thousands of employees" and "hoist up the industry from its current predicament".
"If we truly want to rebuild and reinforce the industry and ensure that it has the capacity for growth for years to come, we need to work towards a bold new vision: to create the best drinks and hospitality industry in the world," Mr Reid said.
"That requires removing obstacles and using the economic instruments of the State to stimulate a sustainable recovery," he added.