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Drinks industry calls for drop in 'uncompetitive' alcohol tax as sterling value continues to fall

The Drinks Industry Group of Ireland called for a 15% reduction in the tax by 2021.

Image: Shutterstock/moomsabuy

THE DRINKS INDUSTRY Group of Ireland (DIGI) has called for excise tax on alcohol to be lowered by 15% over the next two budgets as the value of sterling continues to drop.

Responding to the Revenue’s latest biannual cross-border price comparison, the lobby group said that Ireland’s “uncompetitive” excise duty was worrying amid the uncertain economic forecast ahead of Brexit.

The informal survey by the Revenue Commissioners charts the prices of a number of products, including alcohol, tobacco and oil, in a number of outlets in Dublin and Newry.

The latest comparison, completed in August when the Euro was valued at 0.9166 pence sterling, was published earlier this month.

It showed that 500ml cans of lager and stout were 17c cheaper in the North, with a bottle of whiskey almost €4 cheaper and a bottle of vodka almost €5 cheaper.

Pointing to the continually falling price of sterling as a result of Brexit, DIGI claimed that cross border shopping for cheaper alcohol was threatening Irish businesses and the economy.

“A scenario where consumers avoid shopping locally, and instead travel North for cheaper alcohol, will impact our pubs, restaurants, hotels and retailers, along with our brewers, distillers and manufacturers and therefore needs action,” the lobby group said in a statement.

“Equally, with sterling declining, shopping for all good and services becomes more attractive so this could have a knock on effect for retailers generally.”

The group called on Minister for Finance Paschal Donohoe to reduce excise tax on alcohol by 15% over the next two budgets, with a 7.5% reduction in Budget 2020 and a further 7.5% reduction in Budget 2021.

It claimed that this would allow the industry to become more competitive relative to the North.

“It will discourage cross border shopping for cheaper products and for individual businesses, particularly those in rural Ireland, to trade more competitively and better protect themselves for any Brexit-induced downturn,” the group added.

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