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Policy

Drinks industry claim the Irish pub is under threat from tourists flocking to 'more affordable' Britain

That’s according to a drinks lobby group that thinks a cut in excise duty could help solve the problem.

IRELAND COULD LOSE a large chunk of its tourists to the UK quite soon due to the dramatic decline in the value of the pound.

Last week, sterling reached an eight-year low against the euro, with financial firms Morgan Stanley and HSBC forecasting that the currencies could hit parity this year.

The Drinks Industry Group of Ireland (DIGI) – which counts the Irish Hotels Federation and Restaurants Association of Ireland as members – has warned that the pound’s devaluation is making the UK a more affordable destination for tourists and could filter visitors away from the Republic.

Donall O’Keeffe, secretary of the DIGI, said the UK is Ireland’s “largest competitor” for tourism and high levels of excise tax on alcohol could make it harder for the Republic to compete.

“One of Ireland’s unique tourism offerings is the Irish pub and we are hampering our own tourism product with excessive taxation,” he said.

Ireland has one of the highest rates of excise on alcohol in the EU.

O’Keeffe added that if Ireland started to lose tourists to the UK, it would “seriously hamper” the government’s plans to create 50,000 new tourism jobs by 2025.

A perfect pint of Guinness in Slatterys Rathmines SIPA USA / PA Images SIPA USA / PA Images / PA Images

He claimed that Ireland has already lost a chunk of its visitors from UK because they find the country “too expensive”.

O’Keeffe is also the head of the Licensed Vintners Association (LVA), a group that has been fighting to preserve the 9% VAT rate paid by pubs, restaurants and other tourism-related businesses. The LVA is also a member of the DIGI group.

The tax rate for the tourism industry was reduced from 13.5% to 9% in 2011 in a bid to give a much-needed boost to the hospitality trade. It was due to be phased out by the end of 2013 but has since been extended indefinitely.

Last year, a report showed that the Irish tourism industry is in rude health and worth over €8 billion, with spending by international visitors in Ireland rising by 9% to reach €4.7 billion.

Budget

Overall, the hospitality and drinks industries employs just over 90,000 nationwide and the sector accounts for a large portion of rural Ireland’s economy, according to the DIGI.

O’Keeffe has also called for a special ‘Brexit Budget’ from the government to protect the drinks industry from UK’s impending exit from the EU.

He said that measures also need to be put in place to combat the rising tide of cross-border shopping that is “now re-emerging”.

He noted that recent figures from InterTradeIreland on cross-border shopping shows this “economic phenomenon” is at its highest level since 2009.

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Written by Killian Woods and posted on Fora.ie

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