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No-deal Brexit Could Force Some Drink Businesses To Close Up Shop, Says DIGI

Published on Aug 29 2019 3:50 PM in Drinks tagged: Trending Posts / DIGI / Excise Tax / ‘No Deal’ Brexit

No-deal Brexit Could Force Some Drink Businesses To Close Up Shop, Says DIGI

"In extreme cases no-deal Brexit may lead to a recession-type downturn and force some businesses to close up shop," Rosemary Garth the Chair of Drinks Industry Group of Ireland (DIGI) has said.

Garth, who is also the director of communications and corporate affairs at Irish Distillers highlighted: “For drinks and hospitality businesses in rural Ireland, particularly the seasonal kind, reduced spend by British tourists will have a lasting, damaging effect on their ability to take on new workers or keep on existing staff."

The warning was made in a new report, 'National and regional employment in the drinks and hospitality sector in 2019', commissioned by DIGI and authored by DCU economist Anthony Foley.

Employment 

The report highlighted that almost 70% of Ireland’s 5,876 drinks manufacturing jobs are located outside of Dublin.

As many as 175,000 people, or nearly 8% of all Irish workers, are employed in drinks and hospitality jobs roles, the report showed.

According to the recent industry analysis by DIGI, 90,000 people are directly or indirectly employed by the core drinks industry, which includes pubs, breweries, distilleries, restaurants, and other associated businesses.

Reduce Excise Tax

Ireland has the second-highest overall alcohol excise tax in Europe, the highest excise tax on wine, the second highest on beer, and the third highest on spirits, the group said.

Combined with the threat of a no-deal Brexit, a recently raised VAT rate, and rising operational costs (particularly insurance premiums), many rural drinks and hospitality businesses are at real risk of laying off employees or closing completely.

“By reducing Ireland’s disproportionately high alcohol excise tax over the next two years, the Government will be giving drinks and hospitality businesses a lifeline," Garth suggested.

"Rural businesses will be better positioned to weather the worst of a no-deal Brexit, to be more competitive and improve trading.”

© 2018 Checkout – your source for the latest Irish retail news. Article by Donna Ahern. Click subscribe to sign up for the Checkout print edition. 

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