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Ireland has one of the most heavily taxed drinks industries in Europe, with €1 in every €3 spent on alcohol being taxed, according to a report published today.
The report carried out by the industry itself also shows that the number of people employed by drinks manufacturers has fallen by 27 per cent in the last eight years and that over half of Irish pubs had sales of under €200,000 per year.
Chairman of the Drinks Industry Group of Ireland (DIGI), Michael Patten, said Irish companies were losing out to foreign manufacturers with a 22 per cent drop in the consumption of domestically produced alcohol. In contrast, the volume of beverages produced abroad but consumed in Ireland had risen by 90 per cent since 2000.
The DIGI report also highlighted the problems of higher input costs and falling national competitiveness as well as issues of taxation as being the greatest threat to the industry, which Mr Patten said made made a compelling argument for wage restraint in the current partnership talks.
Alcohol consumption, which peaked in 2001, has fallen by 5 per cent since, while the proportion of total personal consumption also showed a decline from 9.7 per cent in 2000 to 8 per cent in 2006.
Mr Patten said the report underlined the importance of the drinks industry to the economy, but warned that local manufacturers were being squeezed through higher input costs and penal taxation levels.
The report revealed that the Government receives €1.16 (29.7 per cent) in taxation from every pint sold, €15.24 (62.3 per cent) of the price of a bottle of whiskey in an off-licence and 37.9 per cent from a €10 bottle of wine, with the excise duty on wine sold in Ireland the highest in the EU.
The excise duty on beer, spirits and cider is the second highest in the EU.
The report’s author Anthony Foley of Dublin City University Business School said there was a stark contrast between the general practice in the EU where countries supported their local drinks producers to that in Ireland, where local producers are subject to “exceptional levels of tax”.
The report’s key findings showed that:
