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Tapped Out

Government not planning to reduce excise duty on alcohol following Heineken price rise

The company announced yesterday that it is increasing its keg prices by 9%.

THE GOVERNMENT HAS said it has no plans to reduce excise duty on alcohol after Heineken announced it was upping its prices. 

The company announced yesterday that it is increasing the price of its kegs by 9% due to “significant increases in the cost of energy, packaging, and raw materials.”

The increase is equivalent to a 17 cent rise in the price of a pint, before VAT.

It came as a surprise to many publicans, with The Vintners’ Federation of Ireland saying its members were “extremely concerned about this price rise.”

“There is never a good time for such a price increase, but in the current climate where everyone is feeling the impact of soaring costs this is particularly poor timing,” Vintners’ CEO Paul Clancy said.

“Due to the cost of doing business, most publicans will have to pass on the price increase to their customers.”

Speaking to reporters in Blackpool today, Taoiseach Micheál Martin ruled out an excise cut on alcohol. 

“There’s a lot of pressure all around because of the economy. We all know there’s a cost of living issue arising out of the war in Ukraine. A lot of energy price increases. I don’t have the full facts in relation to the factors that have governed Heineken’s decision. That’s a matter for Heineken,” he said.

“They have to be acutely aware of the consumer’s capacity to absorb such price increases, I would have thought, and so do the publicans have to be very mindful of what the consumer can absorb.

“But the Government doesn’t have any plans at this stage to change excise duties.”

The Taoiseach declined to comment on whether he thought pubs were price gouging. 

In a statement to The Journal, a spokesperson for Heineken said that due to significant increases in the cost of energy, packaging, and raw materials, Heineken Ireland “has been left with no choice but to amend its pricing in the Irish on-trade market”.

“As a result, we have written to our on-trade customers to advise them of a 9% increase in wholesale draught prices to more closely reflect the current cost of producing and supplying our products,” the spokesperson said.

They added that the company “is not passing on the full impact of cost rises for its Irish business.

“Heineken sets the wholesale price that is charged for its products but has no role in relation to the price paid by the consumer, as this is set by individual operators within the on-trade sector.”

Other beers distributed by Heineken Ireland include Orchard Thieves and Coors Light.

One publican wrote on Twitter that they would no longer be serving Heineken products as a result of the new prices.

Chief Executive of the Restaurants Association of Ireland, Adrian Cummins, said the price increase from Heineken will be passed on to customers.

Cummins said the association was surprised by the level of price increase announced, and said it will add to the cost of living crisis for consumers and for businesses.

Additional reporting from Emer Moreau

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