Drinks exports crucial to Irish recovery - DIGI report

Drinks exports crucial to Irish recovery - DIGI report

Ireland's drinks trade body has called for a further 20% cut in alcohol duty tax in the Government's 2011 Budget as the sector continues to leak jobs in the country's economic downturn.

A duty cut is one of five proposals put forward today (1 November) by the Drinks Industry Group of Ireland (DIGI) ahead of the Government's Budget announcement in December. It also wants a reduction of value added tax for the on-trade, but would be prepared to accept a ban on selling alcoholic drinks at 'below cost' prices.

Industry lobbying helped to persuade Ireland's Government to cut drinks duty tax by 20% in December last year. DIGI said that its call for a further reduction was "based on the positive outcome" of last year's decision.

It said that the industry has provided EUR2bn (US$2.8bn) in tax receipts to depleted Government coffers in the last year.

This is despite ongoing turmoil in the on-trade, which employs one in four fewer people than in 2000. Across Ireland's drinks industry, employment has fallen from 100,000 at the start of 2008 to 78,000 now, DIGI said. Per capita alcohol consumption has fallen by 16% over the same period, it said.

DIGI chairman Kieran Tobin said: "Last December, the Government gave consumers and our industry a very welcome boost through the excise reduction announced in the Budget. This had an instant effect in stemming the flow of cross-border sales in advance of Christmas last year and in the first six months of 2010.

“Now, however, there is growing evidence that footfall levels in Northern Ireland are again on the increase. Also the accelerating decline in the on-trade is a major concern for the Industry."

Several companies have reported tough trading conditions in Ireland as the country struggled to overcome the effects of the global economic downturn. Last week, C&C Group said that it would cut a further 50 jobs at its Bulmers cider site due to a "dramatically weakening consumer environment".

For the full DIGI report, click here.