Diageos Ireland chief has warned of grave consequences from the hikes

Diageo's Ireland chief has warned of grave consequences from the hikes

The head of Diageo's Ireland business has heavily criticised last week's alcohol duty rises, warning it will cause "serious and lasting damage" to the country's drinks industry.

In its Budget last week, the Irish Government announced an 18% increase on beer tax, and a 15% rise on wine and spirits. The move has already attracted criticism from trade groups in the country. 

In yesterday's Irish Independent, David Smith, Diageo's Ireland director, warned "when you increase excise, you kill jobs". 

He wrote: "It (the duty rises) makes it an absolute certainty that, come next October, there will be fewer businesses, and fewer jobs in the drinks industry." 

Smith, who is also chairman of the Irish Brewers Association, said Ireland's drinks industry had taken a "wallop", with the third successive duty increase. 

He added: "There is no doubt in the industry that the Government's high tax policy will cause serious and lasting damage." 

Smith also argued that the higher taxes will "make cross-border shopping more appealing", with consumers more likely to shop in Northern Ireland. 

The Diageo executive also warned of the impact high duty rates are having on Ireland's on-trade. "In the last five years, more than 1,000 pubs have closed their doors, and high taxes are playing a significant part in that," he wrote. 

In addition to the duty increases, Ireland's drinks industry is also facing the threat of a ban on companies sponsoring sports events and using outdoor advertising.  Last year, Diageo's then-CEO Paul Walsh branded the plans "ridiculous"

Expert analysis

Ireland Beer Market Insights 2013

Ireland Beer Market Insights 2013

This report comprises of high level market research data on the Ireland beer industry, published by Canadean. The report covers total market (on- and off-premise) and includes valuable insight and a...read more