A voluntary freeze on drink prices by the licensed trade would have a positive impact on Ireland's inflation rate, the Minister of State for Consumer Affairs, Mr Tom Kitt, has claimed. However, his appeal to publicans has been dismissed by the Labour Party as an "ineffectual response" to price increases.
Mr Kitt issued his request to the licensed trade in response to the latest consumer price index (CPI) figures, which show the increase in drink prices accounts for one-fifth of the rate of increase in inflation.
He said that while he did not favour the reintroduction of a prices order, he was calling on the licensed trade to agree voluntarily to freeze prices "at least up to the end of the year". He was also concerned about increases in the price of soft drinks.
Responding to Mr Kitt's call, Mr Tadgh O'Sullivan, chief executive of the Vintners' Federation, called on the Government to reduce excise duties on alcohol.
"Why doesn't Minister Kitt take 8p off excise taxes? That will bring down the price of the pint by about 14p or 15p. The Government is getting much more out of the pint than we are, probably five times as much, i.e. 40 per cent of the retail price. Publicans wouldn't get 5 per cent after overheads," he said.
Mr Pat Rabbitte, Labour spokesman on enterprise, trade and employment, said pleading with publicans was "an ineffectual response".
He said the Minister should investigate the impact of a voluntary price freeze "behind closed doors" and then announce it publicly if it was found to be effective.