Case for alcohol duty reduction

September 6th, 2015 9:29 AM

By Southern Star Team

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THE pitch by the Vintners’ Federation of Ireland (VFI) and other drinks industry representative groups for a reduction in excise duty on alcohol in the forthcoming Budget on the basis of the Irish pub being a central part of our tourism offering is a bit rich, to say the least. In making its case, VFI quotes recent research that overseas visitors spend 21% of their holiday expenditure on food and drinks and asks why are we continuing to make Ireland more expensive with high levels of excise on alcohol?

Other providers of tourism services and products have benefitted from the reduction of VAT to 9% in recent years and this has helped in the provision of value for money, as have other factors such as the current weakness of the euro currency against sterling and the US dollar. Now, the drinks lobby wants to piggyback on this with its claim for a reduction in excise duty on alcohol, saying that the pub is good for tourism and claiming that the industries’ interests are mutual.

The VFI also argues that, not only would such a reduction benefit tourism and overseas visitors, but it would also benefit Irish consumers, boost the economy and result in even more jobs being created. From the point of view of the drinks manufacturers, an excise duty cut would increase alcohol consumption, which has been falling in recent years, but do we – as a nation – really need this, especially from a health viewpoint?

One big hole in the argument being made for the excise duty reduction is that overseas visitors do not seem to be complaining about the price of drink here, which is no worse than most other comparable tourist destinations, so this would not be a game changer for them. If the price of drink was a deterring factor for tourists, no doubt Fáilte Ireland would urge the government to give a sympathetic hearing to the representations of the drinks and pub industry.

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