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Budget 2015: The Impact On Retail

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Budget 2015: The Impact On Retail

We were promised a Budget that would 'give back' to hard-pressed consumers, and while there were indications that the government is prepared to put money back in the pockets of consumers, an increase in the price of tobacco products left a bitter taste in the mouth for the retail trade.

From today a packet of premium cigarettes will rise 40 cent, to around €10. Tobacco firm John Player said that it was "taken aback" by the 40 cent increase.

"This is not the time to be further incentivising the criminal community," it said in a statement. "A parallel illegal tobacco supply chain exists in this country that pays no tax at all to the Irish Exchequer. […] Smugglers will certainly party tonight. This is a great day for ‘South Armagh Duty Free’."

In addition, roll-your-own tobacco will increase by a further 20 cents per 25 gram pack.

Excise duty on alcohol products remains unchanged, despite many drinks industry lobby groups hopeful that last year's excise increases would be reversed.


The Drinks Industry Group of Ireland (DIGI) welcomed the decision not to increase excise on alcohol, as well as acknowledging the government's decision to offer excise relief for microbreweries, which it said is a 'recognition of the significant role that the sector has to play in creating jobs, supporting our economy and driving tourism'.

“The drinks industry was hit with excise increases in Budget 2013 and 2014, so we welcome the Government’s decision not increase excise on alcohol today and to increase excise relief for microbreweries," said Peter O’Brien, DIGI chairman and European Corporate Relations Director for Diageo.

"However, it must be stated that the current excise level in this country is uncompetitive and that while today’s announcement represents an important first step in supporting this industry, we would call on government to reverse the excise increases of recent years in next year’s Budget.

In addition, no excise duty increases on petrol or diesel were announced, which will be welcomed by forecourt operators and fuel businesss.

"The change to the fuel excise duty regime will give that sector equal treatment with other excise regimes. It is a sensible move that will help cash flow in this important supply sector," said Ibec chief executive Danny McCoy.


The Budget announcement also saw the retention of the 9% VAT rate for tourism-related activities as well as catering facilities and newspapers. However, there was no reduction in the Employer PRSI rate for Class A employees.

© 2014 - Checkout Magazine by Stephen Wynne-Jones

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