One more round for drinks industry’s campaign for tax cuts

Cantillon: Drinks Industry Group of Ireland call for less tax unlikely to be entertained

Ireland has some of the highest alcohol taxes in Europe. Digi says a cut in those taxes would provide a fillip for struggling hospitality businesses. Photograph: Luke MacGregor

Ireland has some of the highest alcohol taxes in Europe. Digi says a cut in those taxes would provide a fillip for struggling hospitality businesses. Photograph: Luke MacGregor

 

It is that time of year again, when all varieties of lobbyist and vested interest group release their wishlists ahead of the October budget.

The Drinks Industry Group of Ireland (Digi) has been campaigning for a cut in alcohol taxes for the last five or six years. To date, it has had little success. But it isn’t giving up the ghost and on Wednesday it released a report on the sector’s economic impact across the State to back up its call for a cut in excise taxes.

Digi is an umbrella group that includes various vintners’ associations and hospitality trade groups. But it is primarily a vehicle for the major multinational drinks manufacturers that operate here.

The group is arguing for a 7.5 per cent cut in excise in the budget, followed by another 7.5 per cent cut the following year. It argues that the wider hospitality industry, which sells large volumes of alcohol in bars and restaurants, is under threat from a possible no-deal Brexit.

Hospitality businesses

Ireland has some of the highest alcohol taxes in Europe. Digi says a cut in those taxes would provide a fillip for struggling hospitality businesses by lowering their costs. Mostly, of course, it would benefit the large drinks companies that shift huge volumes of alcohol in this market and control the supply to publicans.

Its proposal for a cut in drink taxes would be a hard sell at any time, not least in a year when State resources must be rationed to cope with the far-reaching effects of a hard Brexit.

Irish public policy has for many years veered towards discouraging the consumption of alcohol, not giving it a boost. It is optimistic, to say the least, for the drinks industry to believe its arguments will now hit home.

The drinks manufacturing industry directly employs about 6,000 people across the State. Most of the manufacturing companies that employ those workers, however, are foreign-owned multinationals.

It would take a brave government to give them a taxpayer-funded stimulus when there are so many other demands on State resources in the year of Brexit.