Over 1,000 Irish pubs ‘forced out of business’ by the recession

Drinks industry body claims high excise duty on alcohol making tourism less competitive

More than 1,000 pubs in Ireland have gone bust during the recession, the umbrella group for the drinks industry claimed today.

The Drinks Industry Group of Ireland (Digi), which represents 92,000 employees in pubs, restaurants, hotels and off-licences, said the relatively high excise duty on alcohol was costing jobs and making the country's tourism offering less competitive.

The excise duty on a pint of beer or a standard measure of spirits was increased by 10 cent in the last budget, while the duty on a bottle of wine was lifted by 50 cent.

Addressing the Joint Oireachtas Committee on Finance today, members of Digi called for the reversal of these measures in an attempt to halt the industry's flagging fortunes.

"Since 2007 over 1,000 pubs throughout Ireland have been forced to close. The small pubs in rural communities cannot soak up excise increases across a wide product mix, like a supermarket can – they are forced to pass the increase on to consumers who often assume the publican is price gauging." said Padraig Cribben, chief executive of Vintners Federation Ireland, which is a member of the Digi.

He claimed that 80 per cent of the increase in the cost of a pint in the pub since 2011 has been directly caused by taxation.

"Ireland is the most expensive country in Europe to buy alcohol, which has been identified by tourists in Fáilte Ireland research to be one of their chief concerns about coming back to the country - second only to the weather."

Mr Cribben also said the high level of taxation on alcohol has seen a rise in cross-Border activity as a result of excise increases, causing pubs, independent off-licences and the exchequer to lose out.

On average, there is a 35 per cent price difference between the Republic and Northern Ireland across all categories of alcohol, with Revenue Commissioner figures showing that a bottle of Irish whiskey is €5.50 cheaper in the North, he said.

The disparity in tax codes was leading to a rise in black market trade, with seizures in counterfeit alcohol steadily rising, he added.

To critiques who say that Ireland high excise duty was aimed at curbing alcohol misuse, Mr Cribben said: “Excise is a blunt instrument that unfairly impacts on small local businesses and does not deliver on reducing harmful patterns, like binge drinking.”

“ It is a sledgehammer, not a scalpel. The Government is forcing pubs to charge more, which is driving consumers to buy cheap alcohol in supermarkets and drink at home.”

“Alcohol costs are 78 per cent higher in this country than the European average, so clearly pricing is not addressing the problem.”

Mr Cribben claimed the industry was committed to tackling misuse of alcohol.

He pointed to the fact that members members of the drinks industry, earlier this year, signed a pledge for the introduction of policy options to tackle misuse, including: addressing the widespread sale of alcohol at very low prices in a meaningful way, banning price-based advertising, which encourages an incorrect image of alcohol and the ways in which it should be enjoyed, and also introducing a statutory code on alcohol merchandising.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times