It claims that the Brexit-induced cross-border shopping surge and British tourism contraction alone could cost the Irish economy €130 million before the end of the year.
While Sterling has rallied somewhat of late, €uro/Sterling parity is by no means out-of-the-question and could cost Ireland’s drinks and hospitality businesses tens of millions of €uro in lost revenue as Irish shoppers cross the border for more affordable products, including alcohol.
The warning, issued today by the Drinks Industry Group of Ireland, follows a recent CSO report that implicates cross-border shopping in the decline in State revenue take.
The DIGI has estimated that a surge in cross-border shopping could cost the economy as much as €60 million before the end of 2017. If Sterling continues to drop against the €uro in 2018, reaching parity, these losses could be significantly more.
This problem is compacted by a contraction in Ireland’s biggest tourism market, the UK. In the first seven months of the year, British tourist numbers dropped by 6.2%. If this downward trend continues, decreased spend could cost the drinks and hospitality industry a further €70 million by the year’s end.
“This is before a Brexit deal is even agreed and discounts many other potential costly factors including the loss of customers, introduction of tariffs, new trade regulations and border checks,” commented DIGI Secretary and Chief Executive of the Licensed Vintners Association Dónall O’Keeffe.
Ahead of Budget 2018, the DIGI is calling on the Government to enact a number of pro-enterprise measures including reducing alcohol excise tax by 15%.
“This Government must prioritise protecting the Irish industries that are disproportionately exposed to Brexit, like drinks and hospitality,” he stated.