Drinks industry says tax cut will benef it customers

THE alcohol industry is campaigning for a cut in excise duties in the Budget. Lobby groups claim that any reduction will be passed on to the consumer.

The Licensed Vintners Association (Dublin publicans), the Vintners Federation of Ireland (rural publicans) and the powerful Drinks Industry Group of Ireland, are seeking a 15% cut in the excise duty on alcohol.

Such a cut would cost the Exchequer more than €200m. The groups have pledged that any cut will be passed on to consumers.

They claim that a cut in excise is justified on the basis that Ireland’s overall alcohol excise tax is the second-highest in the EU, behind Finland and that excise duties are a ‘regressive tax on jobs, tourism and regional development’.

However, the Government is unlikely to be favourably disposed to their proposal.

Fine Gael sources warned: ‘There is a sense that publicans, after two wins, are getting too big for their boots. There is also a concern that if you cut the excise, they will behave like the Dublin hotels.’

Tourism Minister Shane Ross expressed concern last week that some hotels in Dublin were charging excessive rates while the industry continued to benefit from a preferential rate of VAT.

Despite the alleged difficulties, alcohol is still big business in Ireland and a major earner for the Exchequer, with receipts to the State of €1.2bn in 2016.

The industry’s appeal runs counter to the Department of Health’s ambition to further reduce alcohol consumption.

A spokesperson said: ‘The priority has to be reducing overall alcohol consumption and thus reducing the harm caused by alcohol in society. The Minister for Health would not be supportive of the call by the Drinks Industry Group for a reduction in the excise rates applying to alcohol.’