Rowing against the grain
The government spends considerable sums each year to ensure a continuing increase in our foreign earnings. Alcohol plays a significant part in this drive, bringing in €1.45 billion last year, up 8% on 2018 and now accounting for 22% of our exports to international markets.
Some bodies such as Bord Bia stand out at aiding our efforts to increase foreign earnings – especially in the drinks industry category, helping bring our Premium quality drink products to the rest of the world – not forgetting the Irish market itself.
Its recently-published Spirits Marketing Strategy 2020-2022 stands testament to its considered approach to overcoming the challenge of increasing our spirits exporting oomph abroad. Through this action plan the state body hopes to deliver a range of services to industry that seek to optimise spirits’ performance and sustain its current growth trajectory.
It will do this by helping drinks exporters scale the barriers to new and upcoming economies and enable greater penetration into established spirits markets and that surely includes our own one here at home.
As government bodies row in behind our drinks exporters, they should also be helping our indigenous drinks producers open new ventures in rural locations here at home thereby creating local employment in areas that would not see much employment otherwise. But it seems that our present domestic alcohol excise & VAT rates are rowing against the general direction of thrust here.
Our 1&1 interviewee this month, the new Chairman of Drinks Ireland|Spirits, Pat Rigney, points out that the government has got to look at the bigger picture and ask what’s fair?
“Are we really aligning ourselves with our European partners in Continental Europe?” he wonders, “Our alcohol excise is four times that of Spain, three times that of Germany and significantly higher than the UK.”
He points out too that with our burgeoning new distilleries, it’s important to build a strong home market. Current levels of excise and VAT combined make this a very difficult market for emerging companies to sell or circulate into.
In this, our high excise and VAT rate pointedly face the wrong way in the good ship Ireland’s galleys, rowing against the grain and impeding our progress through the water.
