Ireland's government has frozen duty tax on alcohol in its emergency Budget, to the delight of the industry.

In a stark assessment of the economic realities facing Ireland in 2009 and 2010, finance minister Brian Lenihan said that it would counter-productive for the Government to seek extra revenue by raising duty tax on alcoholic drinks.

"There is no scope for increases in excise duties on alcohol or petrol because of the substantial risk of loss of revenue by the purchase of these items in Northern Ireland," he said.

Trade body Drinks Industry Group of Ireland (DIGI) has warned that growing numbers of consumers are leaving the Republic to buy their alcohol in Northern Ireland, which comes under the jurisdiction of the UK Treasury.

Value added tax on alcohol in the Republic is 21.5%, while the UK imposes a tax of 15%.

DIGI chairman Kieran Tobin tols just-drinks on Monday (6 April) that it would be "near suicidal" for the Government to raise alcohol tax this year.

He said following yesterday's Budget: "Off-licenses, bars, restaurants, hotels and nightclubs in vulnerable areas will breathe a sigh of relief that the pressure they are under through their inability to compete with their equivalents across the border has not been intensified in today's Budget."

Drinks firms still face a tough year, however. Alcohol consumption across all categories fell by 6% in 2008 and DIGI has warned of further job losses.

Ireland's gross domestic product (GDP) fell by 2.3% last year, its worst performance since 1947. It is expected to fall by more than 6% this year and by another 3% in 2010.