Post-Brexit cross-border shopping ‘threat’ to Ireland
The Drinks Industry Group of Ireland (DIGI) is urging the minister for finance to slash alcohol taxes, as cross-border shopping for cheaper alcohol in Northern Ireland is “now a very real threat to Irish businesses”.
The new DIGI report, Excise Tax Rates in Europe: How Ireland Compares in 2019, authored by Dublin City University economist Anthony Foley, showed Ireland has the second highest overall excise tax on alcohol in the EU after Finland.
It has the highest excise tax on wine, the second highest on beer and the third highest on spirits. This means €12 (approximately US$13) on a bottle of off-licence-bought Irish whiskey is excise tax, according to DIGI.
As such, DIGI is calling for a 15% tax reduction on alcohol over the next two years, starting with a 7.5% cut in the first year, followed by an additional 7.5% cut by Budget 2021.
The fresh calls for tax cuts on alcohol come with Brexit looming on 31 October. Earlier this month, the UK government said UK travellers to the EU would be able to purchase tobacco and alcohol duty free once the UK leaves the EU.
Rosemary Garth, chair of DIGI and director of communications and corporate affairs at Irish Distillers, warned a no-deal scenario would be “disastrous” for rural Ireland, and lead to consumers in the Republic making bigger beverage purchases outside of the country.
Garth said: “The results from a survey of prices in certain retail outlets in Dublin and Newry, published by Revenue [Irish tax and customs] only last week, shows that alcohol prices remain significantly cheaper in Northern Ireland. The survey focuses on taxes and heavy goods.
“Given the price differential, cross-border shopping for cheaper alcohol is now a very real threat to Irish businesses, to our economy and to the Exchequer, and one which needs to be discouraged at all costs.
“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.
“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.”