And could this be put forward as a reason for not taking the EU-advocated alternative route of raising taxation on alcohol?
Such heavy excise tax on the Irish drinks industry has undoubtedly hindered economic expansion here just as it is doing in another EU country, Greece, preventing our economy’s return to full growth.
Figures from spiritsEurope, the European representative body for producers of spirit drinks, indicate that despite raising Greek excise on alcohol there by 125% in four years the expected Exchequer returns did not come through for the Greek government either, the optimum balance between alcohol excise and consumer willingness to pay having been well overtaken at this point.
As was the case here a few years ago when our spirits excise tax tipped the balance, Greek alcohol’s high excise tax has simply encouraged smuggling and other forms of tax evasion, thus adding its weight to a Greek Black Economy that was always of legendary proportions.
Official spirits sales there fell 46% in four years with excise takings shrinking from €348.76 million in 2011 to €272.4m last year.
Employment in the hospitality industry and Greek tourism number among the casualties of this regressive taxation policy on alcohol which has proved itself one of the most inefficient political options in the past.
Like the industry here in Ireland, Greek producers are strongly advocating a de-escalation of the excise rate over a three-year period to drive growth and create jobs.
Nearer home, the UK Chancellor of the Exchequer saw the wisdom of such a policy some time ago and began reducing excise tax on beer and freezing that on spirits with a consequent fillip to employment in the industry there.
Once again, there’s a chance for this government to learn the lessons of others who’ve gone before them and reduce taxation on alcohol to boost employment in the hospitality industry.
But will they listen?