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Dublin: 18 °C Monday 28 July, 2014

The government needs to rethink its approach to whiskey (and not the stuff in the Dáil bar)

The Oireachtas Agriculture Committee has been told that the high level of excise duty on spirits is putting the livelihoods of 12,000 families and a €1bn injection into the Irish economy at risk.

THE GOVERNMENT NEEDS to rethink its approach to whiskey if the sector is to continue to grow at a rapid pace.

That’s what the Oireachtas Committee on Agriculture was told this afternoon by farmers, distillers and representatives from the Drinks Industry Group of Ireland (DIGI).

The committee heard that the excise duty on whiskey – which is the third-highest spirits excise in the EU – is stunting growth in the sector, putting jobs at risk and hurting tourism.

Peter O’Brien, Chairman of DIGI and Diageo’s European Corporate Relations Director, said that the current excise tax is one the industry “simply cannot afford”.

Excise Duty and VAT makes up 66% of the cost of a bottle of whiskey.

“It is a tax on jobs, tourism and the hard pressed Irish consumer. The drinks industry is on the cusp of a period of growth and drinks related tourism is booming,” O’Brien stated.

“The right policy choices by government can ensure that this growth potential is realised over the coming years,” he added .

The sector will bring in €1bn to the Irish economy in the next decade and is set to double its exports by 2020 and again by 2030.

Last year 6.2 million 9-litre cases were exported worldwide, this figure is predicted to jump to 24 million cases by 2030.

Some 90% of spirits produced here are exported to over 120 markets around the world.

About 12,000 families in Ireland are supported by the industry which provides demand for 300 million litres of milk, 200,000 tonnes of barley and 50,000 apples each year.

Barley farming

Willie Masterson, who has been farming in Bunclody, Co Wexford for 25 years, told the committee that over 35,000 tonnes of malting barley was sold to the Drinks Industry by farmers in Wexford last year – with 500 tonnes coming from his own farm.

“The increase in the global demand will mean a fourfold increase in demand for the ingredients that go into producing whiskey – like the malting barley that comes from our farm. This would provide much needed security for farms like ours,” Masterson said.

Distilleries

Marie Byrne is currently setting up the Dublin Whiskey Company distillery in the Liberties. It’s one of 15 new distilleries being developed across the country.

Irish whiskey is on its way back … The growth in this sector is of obvious relevance to this committee given that malting barley is the central ingredient.

To reach its full potential the industry needs a holistic approach that supports small companies like mine in the period before we start producing.

“We need a robust home market before we can scale to export the product. At the moment government policy is simply not allowing this to be a realistic option,” Byrne said.

Read: Whiskey’s going to be bringing a lot of dosh to Ireland over the next 10 years…

Read: €5m distillery planned for Dublin church

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