Call of duty: wine trade argues for budget relief

Minister for Finance appears unlikely to reduce duty from €3.19 on every bottle of wine sold

 

Over the last few months, the Irish Wine Association and other groups have made a persuasive argument for a decrease in the excise duty on wine. We pay an extortionate €3.19 excise duty on every bottle of wine we buy. Add 23 per cent VAT to the price and the Government takes more than half the money you spend on a €10 bottle of wine.

Sparkling wine, for some reason, is double that. Aldi and Lidl currently both have one for sale at €10.49; the duty and VAT make up an incredible €8.34 of that. Can they be making a profit?

Sadly, there is one thing I am fairly sure about; there will be no decrease in excise duty on wine in the forthcoming budget. The Minister for Finance has made it perfectly clear in the past that he sees wine drinkers as middle class and wine a foreign luxury and therefore not worthy of his attention. I don’t believe wine should be penalised over other alcoholic drinks but at the moment it certainly is. The best we can hope for is that things stay as they are.

I do hope he has listened to the blossoming craft cider industry and harmonised the excise duty on cider with that of beer. Of all the nascent artisan drinks this must have the greatest potential to bring employment to parts of rural Ireland.

But other than that I expect that there will be no further changes. The Minister will be assisted by the growing calls for action on alcohol abuse. The entire drinks business needs to take our problems with alcohol consumption seriously. While the trade is very keen to point out that countries such as Spain, France and Italy have virtually no tax on wine and other drinks, the drinking culture in those countries is very different.

It seems that Northern European countries, genetically, culturally or simply because of the cold weather, have a propensity to drink more and to excess. Teenagers prinking before heading out for an evening has been well-documented, but our youth is not the only group who abuse alcohol. It permeates every sector of our society and we need to find ways to control it.

It breaks my heart to accept it, but if part of the solution means high taxes, that is something we should be prepared to accept. It seems strange though that one arm of the Government is proposing measures to limit alcohol consumption while others are applauding the opening of new distilleries and breweries around the country.

High rates of duty are certainly not the sole answer. The proposed minimum pricing seems to be the most sensible way forward as it targets those who buy large quantities of cheap alcohol. It would still hit hard-pressed couples who enjoy a bottle of wine once or twice a week over dinner.

A ban on below-cost selling would help too, whatever the European Union has to say. The larger retailers are well aware that drink is a major pull for shoppers and are quite happy to sell at cost or below (and claim back the difference in VAT) to increase footfall. It will be interesting to see how the multiples react to minimum pricing. Theoretically, it should allow them to improve the quality of their wines. If they simply increase the price of existing lines, the public will not be impressed.

There is still a large group of people who abuse alcohol in the pubs, clubs and restaurants around the country, and the high cost does not seem to affect them. Although the new wine shops and off-licences have been a boon for the wine lover, perhaps we need to limit the number of outlets that can sell alcohol for consumption both on and off the premises. For instance, I find it incongruous that a garage can sell wine at the same time as petrol.

This week: three quality wines to enjoy in moderation.

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