Addressing the recent Seanad Brexit Committee on behalf of the drinks sector, agri-food economist Ciaran Fitzgerald has warned of a “perfect storm” hitting an industry which supports 200,000 jobs across the country and which generates €4 billion annually in wages.
ABFI commissioned Ciaran Fitzgerald to write a report on The Impact of Brexit on the Irish Drinks Industry which was published just before Christmas.
Arising from this he outlined a series of recommendations which the industry is now calling on the Government to implement and he also referred to the Government position paper on Brexit published this week which states that there should be “no additional tax or regulatory burdens on industry”.
“Despite the hard work going on across Government departments to try to protect the sector against the impact of Brexit, the unintended economic consequences of the Public Health (Alcohol) Bill will only serve to exacerbate pressure on the sector,” he told the Seanad Committee, “Now is not the time to score own goals by imposing additional regulation and costs on drinks companies”.
Among his recommendations to the Seanad were:
- Reduce excise duties as Ireland has the third-highest excise tax on alcohol in the EU and has the most expensive alcohol in the EU at 175% of the EU average. This impacts tourism, penalises consumers and restricts the sector’s economic contribution
- Do not introduce measures included in the Public Health Alcohol Bill such as Minimum Unit Pricing and amend proposed marketing and advertising restrictions in order to ensure that product innovation can continue in Ireland
- Adopt the standard EU label which is currently being worked on by the EU Commission in conjunction with industry rather than imposing a costly “Ireland only” label which will add significant costs to craft brewers and distillers
- Defer watershed restrictions for alcohol advertising on TV and radio as there is no evidence that they work. The proposed watershed will only apply to domestic broadcasters and will not apply to broadcasters outside the jurisdiction nor to ‘on demand’ or online programming, which is now the most common way of viewing content by 15-18 year olds
- Ensure the protection of all-island Geographic Indicators for Irish Whiskey, Irish Poteen/Irish Poitín and Irish Cream to ensure that products distilled across the island can continue to benefit from the same labelling and regulatory standards. This will mean that Irish whiskey distilled in Northern Ireland is equally entitled to use the designation “Irish Whiskey” in the same way as a product distilled in the Republic
- Challenge EU State Aid rules to promote future trade with the UK and other new markets. Current rules impose restraints on Irish companies – restraints that will become all the more evident when the likes of Scotch whiskey are not subject to such rules
- Avoid imposing additional regulatory costs by ensuring that a hard border between Northern Ireland and the Republic is not re-introduced and the free movement of goods and people is maintained to the utmost degree
- In the longer term, the Government should assist the food and drinks sectors to access new markets to replace any lost sales following the UK’s departure from the EU. Scotch whisky, for example, has access to over 170 markets whilst Irish whiskey has only access to over 100 markets.
“In this uncertain economic and political environment in which we find ourselves, it’s vital the Government remains cognisant of the importance of the drinks industry and places its concerns at the heart of Brexit talks,” he concluded, “Although there are several elements we won’t be able to control in the Brexit process, in certain areas ‘self-help’ is possible. This includes ensuring the proposed Public Health Alcohol Bill is made workable through a series of practical amendments.”