05 Sep 2017 | 11.35 am
Excise Headache Angers Wine Importers
Despite penal taxes, wine sales increased 5% in 2016
05 Sep 2017 | 11.35 am
Hefty excise rates are a major headache for Irish wine importers and distributors, according to a new report published by the Irish Wine Association (IWA).
The Ibec business group launched its Irish Wine Market Report 2016 today and is calling for an alcohol excise reduction in the upcoming Budget. It insists that the current “penal excise rate” is bad for jobs, consumers and tourism.
According to the IWA, the Irish government increased excise on wine by 62% since 2012. The increases introduced during the financial crisis as an emergency measure have created significant cash-flow issues for distributors and importers, as many have to pay excise as an up-front cost, the lobby group adds.
Irish wine importers and distributors are now paying €38,240 up-front on excise per 1,000 cases when they are imported, the IWA calculates.
The report also suggests that the negative impact of Brexit on the industry must be considered by the government in Budget 2018. In particular, the IWA says that weak sterling is driving cross-border shopping and has already led to a noticeable decline of British tourists visiting Ireland this year.
The implications of Brexit and Ireland’s penal excise rate have created the ‘perfect storm’ for Ireland’s wine industry, the IWA warns. Speaking at the launch of the report, Jim Bradley, chair of the IWA, said that Ireland’s wine industry is facing uncertainty, which is being exacerbated by the threats of Brexit and an excise increase in Budget 2018.
“Despite this uncertainty and these challenges, the wine industry continues to employ over 1,100 people directly, while supporting thousands of other jobs in Ireland’s 13,000 restaurants, pubs, independent off licences and hotels that sell wine,” he said.
“In 2016, sales of nine-litre cases increased to just over nine million, up from 8.56 million cases in 2015. Over the coming years, the industry will struggle to perform and provide the €380m it paid in excise to the Exchequer in 2016, unless the government takes immediate action to reduce excise rates.”
Bradley continued by noting that Irish consumers continue to pay the highest rate of excise on wine in the EU. “While 14 EU countries pay no excise on wine, the excise rate in Ireland equates to €3.19 for a €9 bottle. This is 64c more expensive than Finland, the second most expensive country in the EU.
“In light of this stark reality, it is imperative that the government decrease the rate of excise on wine in order to alleviate the risks associated with the impact of Brexit. The benefits of an excise decrease will not only benefit consumers but it will protect and create jobs in the tourism, retail and hospitality trade.”
The IWA report also shows that that Chile is number one country of origin for Irish wine drinkers, with Australia, France and Spain coming in as the next three most popular.
Wine is Ireland’s second most popular alcoholic beverage after beer; market share for wine increased slightly from 27.7% in 2015 to 27.8% in 2016. Ireland’s most popular wine type is white wine.