Drinks industry seeks reversal of tax on alcohol

A drinks industry body is calling for a reversal of tax increases on alcohol in last year’s budget as sales decline and almost one pub a day closes.

The Drinks Industry Group of Ireland (Digi) says that the tax increases are "damaging a vital national industry," with 312 pubs closing since the increases were introduced.

Last year's budget saw a 10 cent increase on beer and spirits and €1 added to the price of a bottle of wine. In a pre-budget submission to Minister for Finance Michael Noonan, Digi has warned that the measure is threatening jobs and tourism and damaging the Government's tax take.

In an analysis of figures from the Revenue Commissioners for Digi, Anthony Foley of DCU's Business School says that alcohol sales have declined 4 per cent in the first six months of 2013 compared to the same period last year. The figures are based on Revenue "clearances", which is the amount of alcohol released from bond for sale. Based on this data, cider sales dropped by almost 8 per cent in the period, wine by 9 per cent and spirits by 13.5 per cent. Beer sales however increased by 2.5 per cent.

Analysing figures from the Central Statistics Office, Mr Foley says that the quantity of alcohol sold in pubs is down 3.8 per cent on the first six months of 2012. The value of sales decreased by just over 1 per cent.

Citing data from the Revenue Commissioners, Digi says 312 pubs have closed since the tax increase was introduced. The figures show the total number of pub licences have dropped from 7,357 in August 2012 to 7,047 in August this year.

This follows an ongoing decline in pub licences. Between 2007 and 2013, the number of pubs dropped by 11 per cent from 8,318 to 7,395, or 923 pubs. Digi says research it conducted in 2008 showed that 31 per cent of publicans outside of Dublin did not expect their pubs to continue after their retirement.

The drinks body, whose members include the Vintners Federation of Ireland the Licensed Vintners Association and drinks companies Diageo, Heineken and Irish Distillers, says that the decline of the pub sector is a blow to rural jobs, tourism and community life.