DIGI proposes confidence-restoring measures

Employment in the drinks industry has shrunk by one quarter since 2008 from over 100,000 to just 78,000 as per capita alcohol consumption dries up 16.4 per cent below 2007’s levels. These figures, from the Drinks Industry Group of Ireland’s recently-published The Economic Contribution of the Drinks Industry by DCU Economist Anthony Foley, profile the changes that have taken place in the last few years.

The report also reveals that despite the recession, the Industry continues to provide over €2 billion in VAT and excise revenues to the State and that exports generate €1 billion for the country.

But it’s the employment-intensive on-trade that has suffered an accelerated rate of decline, having fallen 26 per cent from 2000 to 2009 with thousands of jobs, business and livelihoods lost as a consequence.

Accordingly DIGI has proposed a package of measures to help restore consumer confidence and support the hospitality sector. These include:

*   An excise reduction of 20 per cent based on the positive outcome of the  cut in December 2009

*  A 20 per cent reduction in commercial rates and other local authority charges and a new system of determining

   ratable valuations

*  The abolition of the charging of VAT on excise

*  Begin the process of reducing VAT to 13.5 per cent on all beverages in the on-trade

*  A ban on below-cost selling of alcohol.
 
DIGI said that this package will help address the serious decline in the sector that has seen pub sales fall by 14 per cent in the year to date while simultaneously encouraging the public to support their local pub, restaurant, hotel or nightclub and their local off-licence, thus providing a boost to the wider economy.

The report’s author, Anthony Foley, stated, “By any measure the drinks industry is a very significant contributor to the economy through, as the report shows, the wide dispersal of 78,000 jobs, the €3 billion turnover and €1 billion in exports generated by the drinks manufacturing sector, the network of pubs, bars, hotels and tourist centres that are vital parts of our tourism infrastructure and the €2 billion in taxation for the Government.

“This economic analysis clearly shows that given the size and scale of the sector, it is logical that the Government should seek to support it, in whatever way it can.”