Marketing

Brexit – ‘even stronger’ excise reduction case

In it’s own Pre-Budget Submission the Drinks Industry Group of Ireland has urged the Government to ‘take control’ of domestic determinants that can support economic growth and enterprise development after the Brexit vote, such as alcohol excise.

It’s also calling for a 15% reduction in excise on alcohol in the next Budget.

DIGI maintains that excise is a direct tax on tourism. In 2015, Ireland received 3.5 million visitors from the British market generating just over €1bn in tourism revenue.

In the first quarter of 2016, spend associated with visits from Britain grew by over 18%. Therefore DIGI believes that the Brexit vote has resulted in an even stronger case for a reduction in alcohol excise.

DIGI believes that Budget 2017 should make every possible effort to compensate for the negative effect of Brexit such as exchange rate uncertainty, impacts of a new “border” and the impacts that Brexit might have on British tourists and their spend in Ireland.

In this context, it notes that a 2014 Failte Ireland Survey cited the ‘experience of the Irish pub’ as the number one ranked item influencing overseas visitors to come to Ireland.

‘Listening to Irish music in a pub’ was the number one cited activity by these visiting tourists.

DIGI is calling on the Government to reduce direct tourism taxes such as excise to ensure the survival of Irish pubs and the positive effects they have on tourism in Ireland.

DIGI also notes that Brexit has caused Sterling to decline significantly and this is likely to continue for some time thus the lower value of Sterling is an immediate boost to cross-border purchasing of alcohol.

“An alcohol excise reduction is a vital response to the new and immediate effect of the uncertainty caused by Brexit,” commented DIGI Chairperson and Managing Director at Heineken Ireland Maggie Timoney, “Excise increases are detrimental to the Irish drinks and hospitality industry and the 200,000 jobs it supports. Ireland has the second-highest excise on alcohol in the EU.”

 

Excise is a tax on jobs

While the drinks industry in Ireland has experienced a very challenging number of years, there are parts of the sector that are now on the cusp of a period of growth such as the Irish whiskey and beer sector. DIGI urges the Government to show support for the business strength and capability of Irish drinks manufacturers by reducing excise and creating a solid domestic market, which will in turn assist in the drinks export drive.

 

Excise is a tax on small businesses

Between 2007 and 2016 the bar sales volumes decreased by 31%. DIGI is urging the Government to reduce excise and support the commercial viability of drinks-related enterprises in the on-licence sector and the independent off-licence sector and assist in improving business and consumer confidence.

 

“Alcohol tax is a regressive and inequitable tax and ours is very high by EU standards,” concluded Maggie Timoney, “We believe that the particularly high Irish excise tax is detrimental to economic growth and economic activity. We’d urge the Government to reduce excise by 15% in October’s Budget.”

 

 

The drinks and hospitality sector in Ireland facts:

203,509 jobs

Wages: €4.3bn

7,193 pubs

631 licenced hotels

2,406 licenced restaurants

3,232 off licences

€99m agri-output

178 wholesalers

57 producers

 

 

 

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