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Excise increase will damage jobs and tourism

The Drinks Industry Group of Ireland (DIGI) has expressed extreme disappointment at the decision of the Government to increase alcohol excise by 10 cent on beer, cider and spirits, and €1 on a bottle of wine, in today’s Budget 2013 announcement.

DIGI said that while it fully understands the difficult economic position that confronts the Government, any revenue raised through these taxes would be offset by further market declines and job losses throughout the drinks industry, and could potentially cost the Exchequer by provoking a return to cross-border shopping.

DIGI added that the increase would impact further on consumer confidence that is crucial to the hospitality sector, and runs absolutely contrary to boosting tourism through initiatives such as The Gathering and last year’s decision to reduce the lower rate of VAT.

The Chairman of DIGI, Kieran Tobin, added, “Given the weakness in the domestic economy and pressures on discretionary income, the drinks industry has endured significant sales declines and the loss of thousands of jobs. Total employment stood at approximately 100,000 jobs before the deep recession, but latest estimates put that figure at less than 60,000. At the same time, pubs and bars have suffered a sales decline of over 35%.

“In this context, the excise increases announced today simply further the burden on pubs, bars, restaurants, hotels, and independent off-licences and put more jobs, businesses and livelihoods at risk. This directly contradicts the Minister’s stated aim to support job creation and small business.

“It will also act as a major disincentive for the Irish public and visitors to spend money in the wider hospitality sector that remains a crucial part of the economy, while simultaneously encouraging consumers to travel to Northern Ireland to purchase alcohol and other goods.

“Irish drinks exports continue to perform extremely well on international markets and that success is built on a solid domestic base. While the drinks industry will continue to work with Government on strengthening our export performance, it is very regrettable that they have jeopardised the market at home through today’s decision.”