Pack of cigarettes to cost €10 but alcohol untouched

Old reliables: no increase in the price of wine, beer, spirits, petrol and diesel in Budget

When it comes to raising money in the Budget, the Old Reliables don’t appear to be so reliable any more after the Minister for Finance Michael Noonan announced that he would be leaving alcohol, petrol, diesel, motor tax and vehicle registration tax untouched this year.

The news wasn’t so good for tobacco lovers, however. Smokers will be left spluttering after the Minister added 40 cent to the price of a packet of 20 cigarettes effective from midnight tonight in a move which will take the price of most well known brands to €10.

A 25 gram pouch of roll-your-own tobacco will increase by a further 20 cents a pack.

Mr Noonan said he would not be raising any other taxes because he was able "to fund the costs of these reforms and incentives through improved tax revenues arising from economic growth and continued expenditure restraint".

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The drinks industry welcomed the news Mr Noonan was to lay off wine, beer and spirits .

"We are pleased that the Government has decided not to impose further increases in excise at a time when the pub trade continues to experience significant challenges," said a spokeswoman for the Vintners Federation of Ireland (VFI).

She described the decision as “crucial at a time when we are seeing a tentative increase in consumer confidence” and said it was “a recognition of the contribution of the Irish pub which accounts for over 50,000 jobs and contributes significantly to the exchequer”.

There was even better news for the nation’s micro-brewers. “ Microbreweries in Ireland have been a success story in recent years,” Mr Noonan said. “They have expanded their market share, provided employment throughout the country and are now making inroads into markets abroad. To further assist the development of this sector and not to stand in the way of growth, I am increasing the annual excise relief production ceiling for microbreweries from 20,000 to 30,000 hectolitres.”

Conor Pope

Conor Pope

Conor Pope is Consumer Affairs Correspondent, Pricewatch Editor