“Irish tourism is driven by our drinks and hospitality sector, which employs almost 8% of the entire country in pubs, restaurants, hotels, breweries, distilleries and other supporting businesses,” she stated, “Most of the sector’s employees live and work in rural Ireland.”
For business owners in this sector, there’s a ‘perfect storm’ brewing with UK tourism dropping and Sterling/€uro almost at parity, she said.
Last year’s VAT hike has eaten into profit margins, she claimed, adding that a no-deal Brexit will further damage Sterling and further reduce overseas visitor numbers.
“Even more significantly, it will encourage cross-border shopping which is a major concern for this industry, diverting sales from Irish businesses to cheaper produce across the border which would severely impact this industry as occurred in the past,” she explained, “A disruption in agri-food will cause disruption in drinks production, leading to knock-on effects for drinks retailers and hospitality providers. Jobs will be lost and businesses will close, especially in rural areas.
“Obviously, the daily chaos in Westminster makes long-term planning for a no-deal Brexit immensely difficult. However, considering that the chance of the UK and the EU reaching a deal is now very small, the Irish Government must do everything in its power to lower or remove barriers that impede Irish businesses from operating at their maximum efficiency and productivity.
“For a start, we need to ensure that our taxation policies are competitive. Ireland’s excise tax on alcohol is the second-highest in the EU even though much of our tourism is driven by our internationally-renowned drinks industry.
“France and Germany, which are equally famous for their drinks products, levy excise tax of just three cents on a bottle of Cabernet Sauvignon and five cents on a pint of lager, respectively.
“In Ireland, however, the Government charges €12 in excise tax on a bottle of domestically-produced whiskey. That means that an Italian tourist will pay €9 more in excise tax on a bottle of Irish whiskey in Ireland than they would on the exact same product in Italy.
“We are asking the Minister for Finance to reduce excise tax on alcohol by 15% over a two-year period: first, with a reduction of 7.5% in Budget 2020, then with a further 7.5% reduction in Budget 2021.
“While a reduction won’t solve the drinks and hospitality sector’s problems overnight, it will give businesses much-needed breathing space and free-up funds to survive a Brexit-induced downturn,” she concluded.