IRELAND: Wine body backs tax cut as sales turn sour

Falling wine sales and a spate of job losses have prompted wine merchants and importers in Ireland to back calls for a 20% cut in excise duty in the Government's upcoming budget.

Wine sales are down 11% across the Republic of Ireland for the year so far, said the Irish Wine Association today (23 November), citing Revenue Commissioners figures.

Group chairperson Philip Robinson backed a call from the Drinks Industry Group of Ireland (Digi) for a 20% cut in excise duty on drinks.

A quarter of the jobs in Ireland's wine sector have been lost in the last 13 months, said Robinson. At the beginning of one of the worst recessions in Ireland for a generation, the Government last year increased excise tax by EUR0.5 on bottles of wine.

"Irish consumers are subject to the highest excise duties on wine in the EU, and since the Government decision to impose a further EUR0.5 on every bottle in the October 2008 Budget, wine sales have declined significantly," said Robinson.

He reiterated drinks industry concerns about the growth in cross-border trade with Northern Ireland, which is part of the UK.

"The Euro/Sterling differential combined with lower excise rates in the UK means that many Southern wine retailers simply cannot compete with Northern counterparts," said Robinson. "It is estimated that up to 6.2% of wine purchases by Southern consumers are now being made across the border."

Ministers have warned that the 2010 Budget will have to be one of the toughest in recent memory if Ireland, one of the worst-hit EU countries in the economic downturn, is to rebalance public finances.

The Government will announce the Budget on 9 December.