Over 85% of all beer sold in Ireland is manufactured or distributed by members of the IBA.
The Association’s Chairman and Country Director of Diageo Ireland David Smith commented, “The Irish brewing industry currently purchases over 170,000 tonnes of malted barley from Irish farmers each year for use in the brewing of beer. This in turn supports over 3,000 farming families all over Ireland, making it one of the most important sectors within the drinks industry in terms of indigenous manufacturing.
“At a time when domestic beer consumption is falling by roughly 2% year-on-year, we estimate that the recent draconian increase in excise will put serious pressure on IBA members and will inevitably impact on those supplying the brewing industry.”
The IBA carried out an analysis of the sector in response to the Budget announcement (which also saw excise increases in cider, spirits and wine) and found that consumers are now paying an additional 15 cent in tax on each pint sold in an Irish pub compared with December 2011. This is made up of an additional 5 cent in VAT on top of the 10 cent in excise increase.
Its analysis also shows that the brewing sector continues to provide more than €300 million in revenue for the State with a further €400m invested in the production, marketing, exporting and retailing of beer.
The VAT and excise increases of January and December 2012 respectively will have the biggest impact on the pub which has at its heart high quality domestically produced beer. It will damage domestic demand and have a knock-on effect on sectors providing raw materials and other resources required for the production of beer, states the IBA.
Accordingly, it has called on the Government to closely monitor the impact of the excise increase in the early months of this year and to reverse the cut at the earliest opportunity.
“While Irish beer products continue to perform strongly internationally, the domestic market has been declining in recent years,” said David Smith, “The IBA is disappointed that the Government is putting further unnecessary pressure on our sector and its suppliers at a time when it should be supporting large domestic enterprise which sources its raw materials and services from indigenous suppliers.
“The IBA therefore calls on Government to engage with the IBA and its members and the wider agriculture sector to find a way of stabilising and protecting this very important domestic industry.”