The Drinks Industry Group of Ireland (DIGI) have claimed that Irish wine small and medium enterprises (SMEs) will be forced out of existence if the government continue to raise excise duty.
The drinks group recently launched its ‘Support your local’ campaign to highlight that there have been tax increases of 62% or €1.50 on the average bottle of wine in the last two budgets, meaning that wine has been the hardest hit alcohol category in the industry.
Michael Foley, chairman of the Irish Wine Association said that over 1,100 people are employed directly by Irish wine distributors and importers, and thousands more jobs are supported in the 13,000 pubs, restaurants, and independent off-licences that sell wine. He said: "Their livelihoods are now at risk due to the actions of the Government. Such unfair treatment of wine is crippling small businesses across the country. According to Nielsen data to end Dec 2013, volumes in the industry are down 8.6%."
Foley continued: "Excise is a tax on jobs. Increases have added almost €18,000 to the cost of importing 1,000 cases of wine, at a time when the availability of credit is at an all-time low. This has put jobs at risk and has made it impossible to scale up and take on new talent."
Foley also said that excise makes the Irish tourism offer less competitive. Spanish tourists pay almost twice the price for wine in Irish restaurants than they do at home, and Fáilte Ireland research has shown that the price of alcohol is one of the main reasons why tourists wouldn’t return to this country.
Foley continued: "Independent off-licences struggle to stay afloat in the competitive market, as it’s nearly impossible to compete with supermarkets selling wine as a loss leader. It’s shocking how much of the price of your drink goes to the Government. Take a €7 bottle of wine – 64% or €4.50 goes straight to the Government. Wine that is priced greater than €9 has increased from 20% to 46% between 2012 and 2013."
© 2014 - Checkout Magazine by Genna Patterson