The Association has just released its Annual Wine Market Review 2013 which outlines the impact that the 62% excise increase on wine over the past two Budgets has had.
The Association points out that:
“Excise is a tax on small business and jobs”
- Distributors and importers are spending an extra €17,958 in tax on every 1,000 cases, creating massive cashflow issues for SMEs
- Wine sales volumes were down to 8.2 million cases from 8.9 million cases in 2012
- Wine sales generated 30.3% of alcohol tax receipts in 2013 giving the category a disproportionate share of the tax burden.
“Excise is a tax on consumers and tourism”
- Consumers spend €4.86 in tax on a €9 bottle of wine, up from €3.53 in 2011
- Ireland has the highest tax on wine in the EU; 15 countries pay no tax on wine
- Sparkling wine excise rates are double the rates for still wine
- Spanish tourists pay almost twice the price for wine in Irish restaurants than they do at home
The report also looks at consumption habits amongst Irish wine drinkers who prefer white wine to red with white holding a 51% volume share. This marks a shift from 2003 when red wine was the preferred option with a 52% volume share. We’ve also seen that more men over 35 now drink wine (76%) than women over 35 (70%). In terms of our country preferences, Australian and Chilean wines have proven to be the most popular with Irish consumers, holding 20.6% and 20.1% of the market respectively.
The IWA has called for a reversal of last year’s increases in excise which have had significant cashflow implications for small businesses, putting thousands of jobs at risk across the industry.
“The last number of years have been extremely challenging for Ireland’s wine industry,” stated IWA Chairman Michael Foley, “Penal excise increases of 62% over the last two Budgets have pushed the industry to the brink. As well as being a tax on hard-pressed consumers, these increases have put a huge strain on the thousands of small businesses across Ireland that sell wine.
“Over 1,100 people are employed directly by Irish wine distributors and importers, and thousands more jobs are supported in the 13,000 pubs, restaurants and independent off-licences that sell wine. The vast majority of these jobs are in small, family-operated businesses across Ireland.
“Excise increases have had a negative impact on sales and have created significant cashflow issues for distributors and importers as many have to pay excise as an up-front cost. The total payment (including VAT) is now €17,958 higher per 1,000 cases than it was in 2012 at a time when the availability of credit is at an all-time low.
“The message coming from the industry is clear: reverse excise increases and support thousands of small businesses and jobs across the industry,” he concluded.