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26/11/2004
Drink tax 'take' now brimming over, says industry
IRISH people spend almost a tenth of their disposable income -or €6bn a year - on alcohol but one-third of that goes to the Exchequer in taxes and excise, a new report has found.
But the Government should be careful about draconian measures to reduce alcohol consumption which has already peaked and fallen by 5.8pc per capita last year, the Drinks Industry Group of Ireland (DIGI) warned.
The industry employs 80,000 people and is already the most heavily taxed in Europe, with beer taxes 10 times higher than Germany and seven times higher than France, the group found in its report on The Economic Importance of the Irish Drinks Industry.
There should be no Budget hikes in the price of drink and, longterm, the DIGI wanted to see excise rates harmonised throughout the EU, said its chairman Richard Dunne.
"I think we've now reached breaking point in terms of the ability of the industry to continue to bear any further increase in this tax burden," he said.
Ireland was now near the top of the EU drinking league, knocking back 13.4 litres per adult last year, but consumption in many other countries had peaked at much higher rates before declining as was now happening in Ireland, the report found.
Up to half the alcohol we drink could now be coming from off-licences, said report author Anthony Foley.
The off-licence share of sales has soared from 19pc of the total in 1991 to 29pc last year, but because you get more for your money in shops, with alcohol often just a quarter of the price charged in bars, that means it could account for 45-50pc of total alcohol consumed, he said.
The volume of drink sold fell by almost 6pc per person last year, but continuing price rises meant that the value of sales fell by just 3pc, he said.
Drink exports, largely spirits and liqueurs, were worth more than €1bn last year - more than dairy exports and equivalent to 54pc of all meat exports, the report found.
The industry spent €1.5bn on goods and services - primarily agriculture products such as barley for brewing - supporting another 9,000 jobs.
Average wages and salaries in the sector were €43,000 which was almost 50pc more than the average industrial wage.
The reason for the slump in alcohol sales last year was primarily the 42pc increase in excise on spirits which caused a dramatic 20pc decrease in sales, said Donal O'Keeffe of the DIGI and the Licensed Vintners' Association.
Irish Independent
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