A report by Dublin City University (DCU) economist Anthony Foley, reveals that Ireland is paying the second highest level of excise tax when compared to the other 26 EU member states and the UK.
The study shows that excise duty on drinks across the EU and UK range from 55 cents for a pint of lager in Ireland to just 5 cent on the same beverage in Romania and Spain.
Ireland currently has the highest excise tax on wine, the second highest on beer and the third highest on spirits.
A glass of wine in Ireland currently incurs an excise cost of 80 cents compared to 1 cent in France, while on a bottle of whiskey excise duty is over 4 times higher in Ireland than in Spain.
On top of this consumers also pay an additional 23% VAT on alcohol purchases, meaning the Government is getting a total of 30-35% of the retail price of every drink sold.
In light of this, publicans are urging the Government to use the upcoming budget to begin the process of reducing excise duty in Ireland to bring it more in line with other EU countries.
They say a reduction of 15% over two years will go a long way to assist with the rising costs of doing business and to prevent Ireland gaining a reputation as an expensive place for tourists to visit.
A recent report by the Drinks Industry Group of Ireland (DIGI) highlighted that almost 2,000 pubs have closed across the country since 2005, most of those being regional, small and family run premises
Anthony Foley, associate professor emeritus, DCU, said:“The data once again clearly demonstrates the very high levels of alcohol excise in Ireland compared to our EU neighbours which, of course, places a relatively large burden on the Irish drinks industry and consumers compared to other EU members.”
Kathryn D’Arcy, Communications and Corporate Affairs, director, DIGI, said: “To guarantee the sustainability of the hospitality sector in Ireland, and to protect the livelihoods of those people and communities working in the sector, it is essential that the Government make a concerted effort in the upcoming Budget to support the sector into the future.
“DIGI is proposing a 15% reduction in excise duty over the next two years (7.5% annually) to give a much-needed break to businesses who are struggling to keep their lights on and their doors open amid the rising costs of doing business.
“This action from the Government would not just be a token measure, it would be a serious signal of support for the hospitality sector which is at the heart of towns and villages across Ireland.”