Alcohol sales fell by 13 per cent during the first quarter, compared to the same three-month period a year earlier, according to new figures from the Revenue Commissioners.
The Drinks Industry Group of Ireland (Digi) said the figures confirmed fears that a major increase in cross-Border shopping, combined with the economic downturn had exacerbarated the trend of falling sales volumes and average consumption levels that had been established in recent years.
The largest decline was in spirits where sales declined by 19.1 per cent. Sales of beer were down 12.4 per cent while sales of cider and wine fell by 12 per cent and 10.6 per cent respectively.
Digi chairman Kieran Tobin said the the fall in alcohol sales was unprecedented and warned of jobs losses across the sector, particular in businesses located in the border region.
“Revenue Commissioners data is generally used as a measure of consumption. However, given the continuing attractiveness of cross border shopping and the scale of this decline Republic of Ireland consumers are undoubtedly continuing to source some of their alcohol products from over the border," said Mr Tobin.
“Cross border shopping remains attractive even after the April UK budget because of the favourable Euro rate of exchange, lower UK VAT rate, lower UK alcohol excise levels and generally lower business and labour costs in Northern Ireland," he added.
Digi said the Government's decision not to increase excite rates in last month's supplementary Budget was welcome in stemming losses. However, it added that given the scale of the decline in overall sales, thought must be given to considering a reduction in both excise and VAT so that the local sector can compete effectively with competitors in the north.
“Alcohol excise in Ireland is already very high by EU standards and adversely affects our international tourism competitiveness. The Commission on taxation report should take account of the comparatively high alcohol taxation in its recommendations for a reformed tax system," said Mr Tobin.
“We are also determined to work with Government to find ways to support our industry and the 90,000 people it employs in pubs, off-licences, production units, visitor centres, hotels, nightclubs and restaurants throughout Ireland," he added.