News

Ireland’s beer excise is 1,000% higher than Germany’s, second highest in the EU—new industry report

• New report by DCU Economist Tony Foley compares Ireland’s alcohol excise duty with other EU member states;
• Ireland has the second highest overall alcohol excise duty in the EU;
• Ireland also has the highest wine excise in the EU and third highest spirits excise;
• Ireland’s excise tax is ‘an anti-competitive tax on one of Ireland’s largest employers and risks Ireland becoming less attractive to investment and overseas visitors,’ according to The Drinks Industry Group of Ireland (DIGI)

Ireland’s beer excise duty is 1,000% higher than Germany’s and the second highest in the EU, according to a new report, ‘Tax on Alcohol in Europe: Where Does Ireland Rank?,’ authored by Dublin City University economist Tony Foley.

The report, commissioned by the Drinks Industry Group of Ireland (DIGI), found that in addition to having the second highest excise duty on beer, Ireland also has the second highest excise duty on alcohol overall (behind Finland), the highest wine excise, and the third highest spirits excise (behind Finland and Sweden) in the EU. Excise duty is a specific tax levied per unit of alcohol in a drink.

According to Maggie Timoney, Chair of DIGI and Managing Director, Heineken Ireland, Ireland’s excise tax is ‘an anti-competitive tax on one of Ireland’s largest employers and risks Ireland becoming less attractive to investment and overseas visitors.’

‘Ireland’s drinks industry employs 92,000 people nationwide; the wider hospitality sector employs 204,000 people, or 10 percent of the Irish workforce in both cities and rural towns and villages. The hospitality sector purchases €1.1bn worth of Irish inputs annually and exports €1.25 billion worth of produce every year. Today’s report shows definitively that Ireland’s excise duty rates are punitive and completely out of kilter with our European peers.  Ultimately, high levels of excise are a tax on a sector that contributes significantly to the Irish economy in terms of jobs and tourism, particularly in rural Ireland. 

“Ireland’s drinks industry and hospitality sector play a critical role in Irish tourism, with the sector credited among the major attractions for overseas visitors. Post-Brexit, British tourist numbers dropped by 55,300 in the period January 2017—March 2017 compared to the same period in the previous year. We are dependent on British tourism with more than 40 percent of all visitors to Ireland originating in the UK. In a post-Brexit environment which is uncertain, we need to invest in sectors which draw tourists to ensure we remain attractive over other, more affordable destinations,’ Maggie Timoney said.

The report’s author and DCU economist Tony Foley said: ‘When compared with the rest of the EU, Ireland’s alcohol excise duty is very high across all drinks categories; only Finland ranks ahead of us. Put another way, Ireland’s alcohol excise duty is 150% higher than 24 of the other 27 EU member states. Combined with VAT and retail price, this means alcohol is comparatively more expensive in Ireland than it is in many other European countries.’

DIGI will launch Support Your Local 2017 this month – a campaign which seeks to highlight the positive contribution the industry makes to the economic, cultural and social fabric of Ireland, nationally and locally, while also calling for Government supports to ensure the continued growth and development of the industry.

Commenting, Maggie Timoney said: “The industry is a high-growth sector in Ireland, driving investment, innovation and job creation, with nascent distilleries and microbreweries being created which are valuable in terms of exports and tourism. DIGI believes the Government should invest in the drinks and hospitality industry by reducing excise duty, supporting investment and jobs in the domestic economy.

• Read the report here: Tax on Alcohol in Europe: Where Does Ireland Rank?
• View the infographic here: Tax on Alcohol in Europe: Where Does Ireland Rank?