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excise duty

Reducing the price of a pint by 5c would cost the government €41 million

The drinks industry says it would help pub owners but alcohol awareness advocates say it would be damaging to society.

THIS MONTH, ALCOHOL awareness advocates called for the government to leave excise duty alone, warning that any reduction in the upcoming Budget would result in increased consumption and add to the country’s problems with alcohol.

CEO of Alcohol Action Ireland, Suzanne Costello, said cutting the duty would make “no sense for the physical, mental or financial health of the nation”. Last year, when there was an increase in excise duty on all alcohol products, consumption fell by 9.5% and excise receipts increased by almost €150 million.

In a recent parliamentary question, TD Seán Kenny asked the estimated cost to the Exchequer of reducing excise duty on a pint of beer by 5 cents.  Finance Minister Michael Noonan said this would also reduce VAT by 1.15 cent and the estimated cost to the Exchequer of the total reduction of 6.15 cents would be €41 million.

However, the Drinks Industry of Ireland is adamant that such a reduction would be beneficial for pub owners and therefore the wider economy.

It said this would “enable publicans to reduce the price of a pint by the equivalent amount, as has been shown in previous excise reversals when the reduction was passed onto consumers, and thus encourage people to go out in their local towns and villages which would have a wider positive impact on local economies”.

The group said it would make the country more competitive internationally from an excise perspective, as Ireland currently pays the second highest rate of excise in Europe and it help pubs and restaurants across the country to shave their margins and ensure some degree of sustainable profitability.  On top of all of this, they said it would give small business owners confidence to invest and hire new staff.

The government has made no indication of where it stands on excise duty so until next month it remains to be seen which side will win out, but one thing is for sure – readers in our poll earlier this month were fairly clear about what they think:

Read: Higher alcohol prices are working – don’t lower excise duty, says charity>

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