Ireland has highest taxes on wine in EU

Friday, 26 September 2014


New report shows wine sales were down 8.3% in 2013
“Excise is the number one threat to the wine industry” – Irish Wine Association

The Irish Wine Association, which represents wine importers and distributors in Ireland, today released its Annual Wine Market Review 2013, which shows that Ireland’s wine taxes, which are now the highest in Europe, have led to an 8% drop in the volume of wines being sold in Ireland. The group called for a reversal of last year's increases in excise, which have caused significant cash-flow implications for small businesses, putting thousands of jobs at risk across the industry.

The report outlines the impact that the 62% excise increase on wine over the past 2 Budgets has had:

“Excise is a tax on small business and jobs”
  • Distributors and importers are spending an extra €17,958 in taxes on every 1,000 cases, creating massive cash-flow issues for SMEs
  • Wine sales volumes were down 8.2% in 2013, to 8.2 million cases*
  • Wine sales generated 30.3% of alcohol tax receipts in 2013, giving the category a disproportionate share of the tax burden.


“Excise is a tax on consumers and tourism”
  • Consumers are spending €4.86 in taxes on a €9 bottle of wine, up from €3.53 in 2011
  • Ireland has the highest taxes on wine in the EU; fifteen countries pay zero taxes on wine
  • Sparkling wine excise rates are double the rates for still wine
  • Spanish tourists pay almost twice the price for wine in Irish restaurants than they do at home

The report also looked at consumption habits amongst Irish wine drinkers. Irish wine consumers prefer white wine to red, with white holding a 51% volume share. This marks a shift from 2003 when red wine was the preferred option, with a 52% volume share. We have also seen that more men over 35 now drink wine (76%) than women over 35 (70%). In terms of our country preferences, Australian and Chilean wines have proven to be the most popular with Irish consumers, holding 20.6% and 20.1% of the market respectively.

Speaking about the report, Michael Foley, Chairman of the Irish Wine Association and Marketing Director for Findlater Wine and Spirits said: "The last number of years have been extremely challenging for Ireland’s wine industry. Penal excise increases of 62% over the last two Budgets have pushed the industry to the brink. As well as being a tax on hard-pressed consumers, these increases have put a huge strain on the thousands of small businesses across Ireland that sell wine.

"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. The vast majority of these jobs are in small, family-operated businesses across Ireland.

"Excise increases have had a negative impact on sales and have created significant cash-flow issues for distributors and importers as many have to pay excise as an up-front cost. The total payment (including VAT) is now €17,958 higher per 1,000 cases than it was in 2012 at a time when the availability of credit is at an all-time low.

"The message coming from the industry is clear: reverse excise increases and support thousands of small businesses and jobs across the industry," concluded Mr Foley.

*Case = 12 x 750ml bottles

ENDS


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Notes to the Editor

Full copy of 'IWA Annual Market Review 2013' available upon request

About the Irish Wine Association:

The IWA represents wine distributors and importers in Ireland and is part of the Alcohol Beverage Federation of Ireland (ABFI). We promote the economic contribution of the wine industry and advocate on issues that affect our industry. We liaise with relevant stakeholders to create a more sustainable business environment for our members, as well as providing members with access to industry information and an opportunity to share best practice.