DIGI seeks pro-enterprise Brexit measures
The post-Brexit drop in the number of British tourists to Ireland could see the Irish economy lose out on almost €70 million in revenue this year, impacting the tourism sector and the drinks and hospitality industry, according to a new report published today.
7 September 2017 | 0
The Contribution of the Drinks Industry to Irish Tourism, commissioned by the Drinks Industry Group of Ireland and authored by Dublin City University Economist Anthony Foley, shows that the pub and pub culture are vital to Ireland’s tourism product.
But with Brexit impacting the size and spending-power of Ireland’s largest single tourism market, growth in the hospitality industry and the wider tourism sector will be impacted with fewer visitors from the UK hampering growth.
British tourists account for 41% of all visitors to Ireland. In the wake of Brexit, however, fewer are coming.
British tourists spent €1.1 billion in Ireland in 2016, so a 6.2% drop in their numbers in the first seven months of 2017 compared to last year would equate to revenue loss of €68.2 million if the trend continues.
In her introduction to the report, the Chief Executive of Heineken Ireland and DIGI Chair Maggie Timoney states, “Ireland’s international tourism image is, in many ways, defined by its drinks and hospitality industry. Visitors from across the world travel to Ireland to experience the ambience of an authentic pub,
“Since the Brexit vote in June 2016, Sterling has declined 25% against the €uro.
“As has been so often the case throughout the history of this country, when the UK sneezes Ireland catches a cold. For the drinks industry and wider tourism sector, it seems that little is being done to alleviate the symptoms; some measures may even add to the challenges.”
This experience of an authentic Irish pub, a live trad session and a taste of real Irish beer and whiskey are top of tourists’ ‘to-do’ lists on their visit to Ireland, according to the DIGI report.
“While it’s very encouraging to learn that overseas visitors are excited to enjoy Ireland’s drinks industry businesses” said the Chief Executive of the Licensed Vintners Association and DIGI Secretary Donall O’Keeffe, “our tourism sector remains overly reliant on the UK, a market that’s already contracting and set for years of economic uncertainty.”
Sterling’s plummet against the €uro since the UK’s EU referendum in June 2016 has made Ireland a more expensive holiday destination. If the currencies reach parity by the end of the year, as predicted by Morgan Stanley, British tourists could continue to look to cheaper destinations on the European mainland or at home.
Furthermore Ireland’s high alcohol excise tax is hampering its biggest attraction. Excise tax is the second-highest in the EU; broken down by drink type, Ireland has the highest excise tax on wine, the second-highest on beer and the third-highest on spirits.
Without pro-enterprise measures in place, these factors combined could undermine the Government’s ambitious plans to grow annual overseas visitor numbers to 10 million and increase tourism sector employment by an additional 50,000 jobs by 2025, according to Donall O’Keeffe.
“The drinks industry is inextricably wound up in Ireland’s tourism product. With the pub the tourist’s top draw, it makes sense that the Government properly safeguards this essential network of businesses by easing their tax burden, allowing them to become more price competitive and increase their earning potential.”
To protect drinks industry jobs, DIGI is seeking a 15% reduction in alcohol excise tax in Budget 2018—the ‘Brexit Budget’.
“Without any change to this country’s high, even punitive, alcohol excise tax, a continued drop in Sterling will further undercut Ireland’s tourism competitiveness,” he said, “Fewer British tourists will patronise the drinks businesses that are so important to the tourism sector.”
Although there has been an overall increase in tourism, North American tourism is not guaranteed: the current global geopolitical climate has seen the dollar fall against the €uro, making European countries like Ireland less affordable.
“Any decline in tourism numbers will impact rural Ireland the most. In some parts of the country, the tourism sector is the major – and in some cases, only – employer. This could lead to job losses and business closures,” he stated.
“In this year’s Budget, Minister for Finance Paschal Donohoe must prioritise pro-enterprise and pro-growth measures for the drinks and tourism sector, like a reduction in alcohol excise tax,” he concluded, “In addition to helping Irish businesses weather the coming Brexit storm, it will put the Government on a more certain path to achieving its 2025 targets.”
Among the key findings of the report:
- Tourists spend over a third (34%) of their holiday budget on food and drink; this figure rises to 40% for British tourists
- The drinks industry is one of Ireland’s biggest exports: Jameson is drunk in 120 countries, Baileys in 130 and Guinness in 150
- The industry continues to invest and innovate with up to 10 whiskey-related visitor centres recently or soon-to-be opened including the Teeling and Slane distilleries.