Drinks Industry Group of Ireland (DIGI) have said the high level of duties and excise tax on alcohol in the Republic of Ireland resulting in cheaper alcohol in Northern Ireland is "worrying" for businesses.
“The results from a survey of prices in certain retail outlets in Dublin and Newry published by Revenue shows that alcohol prices remain significantly cheaper in Northern Ireland. The survey focuses on taxes and duty heavy goods.
“The results, a stark reminder of the uncompetitive and high levels of duties and excise tax that apply in Ireland, are particularly worrying, given the current political and economic challenges and uncertainty we face ahead of 31 October.
“At a time when a no-deal Brexit is looming, consumer confidence is low, sterling is falling, UK tourism is down and with overall uncertainty in the market, this further deepens DIGI’s concerns about the future of the many thousands of drinks and hospitality businesses that it represents. Immediate action is required.
“Ireland has the second-highest overall alcohol excise tax in the EU, behind only Finland. Irish businesses and consumers pay the highest excise tax on wine, the second highest on beer, and the third highest on spirits, despite the fact that this country produces some of the world's best-known and most beloved drinks products.
“Given the price differential, cross border shopping for cheaper alcohol is a real threat to Irish businesses, to our economy and to the Exchequer and one which needs to be discouraged at all costs. A scenario where consumers avoid shopping locally, and instead travel North for cheaper alcohol, will impact our pubs, restaurants, hotels and retailers, along with our brewers, distillers and manufacturers and therefore needs action.
“Equally, with sterling declining, shopping for all good and services becomes more attractive so this could have a knock on effect for retailers generally.
“As part of a remedy for these significant variances, and to avoid any increase in people travelling north to shop, the Drinks Industry Group of Ireland is calling on the Minister for Finance to reduce Ireland’s excise tax on alcohol by 15% over a two-year period (by 7.5% in Budget 2020 and a further 7.5% in Budget 2021).
“This will allow the industry as a whole to become more competitive relative to the North and the rest of Europe, it will discourage cross border shopping for cheaper products and for individual businesses, particularly those in rural Ireland, to trade more competitively and better protect themselves for any Brexit-induced downturn.”