FDBusiness.com

The Irish Wine Association has launched its Irish Wine Market Report 2015, calling for a 15% alcohol excise reduction in the upcoming Budget, stating that Ireland’s penal excise rate is bad for jobs, consumers and tourism. The Irish Government increased excise on wine by 62% since 2012. These increases created significant cash-flow issues for distributors and importers as many have to pay excise as an up-front cost of €38,240, on excise per 1000 cases.

The report also notes that the potential negative impact of Brexit on the industry must be considered by the Government. In particular, the weak Sterling will likely drive cross-border shopping. The implications of Brexit and Ireland’s high excise rate have created the ‘perfect storm’ for Ireland’s wine industry.

Irish consumers continue to pay the highest excise on wine in the European Union with Ireland’s excise rate per standard €9 bottle equates to €3.19, more than 12% more expensive than the UK. Fourteen European countries pay NO excise on a bottle of wine.

EU League Table: Excise per bottle of wine

Sergio Soriano Cano, a Spanish wine exporter from Grupo Barón de Ley, says: “I have significant experience exporting wine from Spain to Ireland and the biggest challenge I see by far is Ireland’s crippling excise rate on wine. There is a €38,000 up front cost associated with importing 1000 cases of wine, which makes the Irish market challenging.  In Spain the excise rate on wine is zero. Wine in Ireland is very expensive by EU standards, because a huge amount of the cost is taken by the Irish government. In Spain people tell me that they would love to visit Ireland but the wine is too expensive and we like to have wine with our food. I fully back the calls for an alcohol excise reduction in the Irish Governments next Budget.”

Michael Foley, Chairman of the Irish Wine Association and Marketing Director at Findlater Wine & Spirits, comments: “The message coming from the wine industry  is clear: reverse excise increases and support thousands of small businesses and jobs across the industry. The Irish wine industry makes a significant contribution to Ireland’s economy, with 1,100 people directly employed by distributors and importers in Ireland with the majority of these jobs in small, family operated businesses. Thousands more jobs are supported in the 13,000 restaurants, pubs, independent off licences and hotels that sell wine. Excise on wine is totally out of line with our EU neighbours as exemplified by Sergio’s comments today and needs to be addressed. In addition to high excise, the potential negative impact of Brexit is further hitting the wine industry and the drinks industry in general, in particular the weak Sterling driving cross-border shopping.”

The Support Your Local campaign, backed by publicans, restaurants, hotels, independent off-licences and drinks suppliers has said that an excise reduction on alcohol in Ireland’s next budget would help create jobs. Evelyn Jones, Government Affairs Director at the National Off-Licence Association, says: “Ireland’s high excise exerts huge financial strain on thousands of small businesses across Ireland that sell wine. In order to protect and create jobs and alleviate some of the risks associated with the outcome of the Brexit vote, the Irish Government must support the sector by reducing the excise burden on alcohol by 15%. This will not only aid the growth of the Irish Wine sector but will also benefit the consumer, tourism and the hospitality trade.”