US tariffs add to drinks industry’s Brexit & Budget woes
Hospitality employment has grown faster than total employment in the past number of years.
What with a no-deal Brexit being imminent and Ireland’s drinks industry now being dragged into the EU-US trade dispute as tariffs are introduced onto Irish products exported to the US, matters are not helped by Ireland’s alcohol excise tax already being the second-highest in Europe despite the nation’s contribution to the global drinks industry according to a statement from the Drinks Industry Group of Ireland.
The US has announced that both Irish Cream Liqueur (from Ireland and Northern Ireland) and Irish whiskey (Single Malts from Northern Ireland) will now be subject to tariffs in their largest market.
RoI whiskeys appear to have escaped the tariff for the moment.
“With Brexit imminent, the imposition of these tariffs is yet another serious challenge and threat to the All-island economy and represents another hit to Ireland’s drinks industry,” states the DIGI.
And brewers, distillers, publicans, restauranteurs, hoteliers, off-licence owners and other Irish drinks and hospitality entrepreneurs are looking to Minister Paschal Donohoe for support and protection ahead of the final Budget before Brexit, according to the DIGI’s just-published Budget Submission.
“The Government should prioritise and protect hard-hit and vulnerable industries in a no-deal Brexit Budget, particularly sectors which contribute most to rural Ireland and regional economics such as Ireland’s drinks and hospitality businesses,” states the Submission.
Among a number of well-publicised points in the Submission, the DIGI highlights the fact that hospitality employment has grown faster than total employment in the past number of years.
“A no-deal Brexit will disproportionately affect the sector” it continues, “particularly if sterling depreciates further against the euro.
“Parity or near-parity will lower the value of drinks exports to the UK, increase import prices, increase the threat of cross border shopping and further reduce the number of British tourists visiting Ireland.”
Fáilte Ireland has said that at least 10,000 tourism jobs, many of which rely on the drinks industry, could be lost as a result of a no-deal Brexit while a UK crash-out from the EU could lead to the loss of more than one million British tourists each year and €380 million in revenue.
57% of pubs here and a further 44% of Irish restaurants rely on the UK as their main tourism market as retail sales volumes in pubs fell 4.1% in the first eight months of 2019 compared to the same period in 2018.
The threat of increased cross-border shopping will also severely harm drinks producers and hospitality businesses, it points out, where a bottle of Prosecco in NI costs only half of what it costs here.
Our high excise tax also contributes to the perception that Ireland is in the top tier of the most expensive countries in the EU when it comes to the price of food and drink, as signalled by the latest Eurostat data (June 2019) states the DIGI.
While the Irish Government can’t change the outcome of the Brexit vote, it can use its legislative powers to lower or remove any barriers to doing business and protect and safeguard the most vulnerable industries ahead of a no-deal Brexit, commented DIGI Chair Rosemary Garth in calling for a 15% reduction in alcohol excise tax over the next two years.
“With just a few days to go before Budget 2020, DIGI, speaking on behalf of Ireland’s thousands of breweries, distilleries, pubs, restaurants, off-licences and many other supporting businesses, is calling on the Minister for Finance to support the drinks and hospitality industry by reducing the alcohol excise tax burden,” she said.
