41% WINE EXCISE INCREASE DISPROPORTIONATE, EXCESSIVE, AND CONTRARY TO SUPPORTING SMALL BUSINESS - Irish Wine Association

Wednesday, 5 December 2012

5th December 2012 – The Irish Wine Association has described today’s decision by the Government in Budget 2013 to increase wine excise duty by 41% as disproportionate, excessive, and absolutely contrary to their stated aim to support small businesses.

The IWA said that while it understood the tough economic choices that confront the Government, this increase will severely damage the livelihoods of wine importers, retailers and the whole of the hospitality sector in Ireland, the overwhelming majority of who operate very small businesses.

The IWA added that small retailers and the hospitality sector will bear the brunt of the reduction in sales that the decision would provoke. The IWA warned that any revenue raised by the Exchequer through this increase could be offset by losses accrued through a return to cross-border shopping for wine that would undoubtedly result as a consequence of today’s decision.

The Chairman of the IWA, Philip Robinson, commented, “The imposition of such a draconian excise increase, will be devastating to the domestic wine market. The latest Revenue Commissioners data shows that in the year to the end of September, the wine market was down 3.9% with these declines set to continue for the foreseeable future given current economic forecasts.

“Those declines will be significantly exacerbated given today’s decision.

“Wine is also a key component of the tourism experience and the most critical factor (approximately 70%) in a restaurant’s profitability. In rural areas, local pubs and restaurants survival depends on this profitability and the employment it generates (the hospitality industry employs approximately 10% of the entire national workforce). The increase will impact on the Government’s efforts to make Ireland a more cost effective tourism destination, particularly in the context of The Gathering 2013 initiative.

“Furthermore, an excise increase on wine of this scale will increase the price differential between the North and South. The overwhelming majority of wine products will be cheaper in Northern Ireland and will lead to a major surge in cross border shopping. This will create a lose-lose situation for the Government. Revenues from sales will be lost due to declining market share to the benefit of the British Exchequer, while local jobs, business, and livelihoods will be put at risk in the retail and hospitality sectors particularly in the border region.

“The Government states that it wishes to support SME’s, however this decision will damage a lot of small business who depend on the wine industry for their livelihoods. The IWA is therefore calling on Government to reverse this decision at the earliest opportunity.”

ENDS - For further info contact Ronan Farren, Q4 PR, 01 475 1444 / 087 934 0386