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Tax Increases Whack Spirit Sales

The 35% increase in excise on spirits in a period of 10 months (20% in Dec 2012 and 15% in Oct 2013) has had a severe impact on the Irish spirits market, according to Pernod Ricard, owner of the Jameson whiskey brand.

Anna Malmhake, Chairman and CEO of Irish Distillers Pernod Ricard, said the recent series of punitive increases imposed on this vital part of the agri-food industry will have serious consequences, not only for established producers such as Irish Distillers but for new startup Irish whiskey distilleries, publicans, retailers and all of their employees.

“A reversal of the October budget increase is essential in order to avoid the erosion of this proud, indigenous industry and to prevent a rapid resumption in cross-border shopping,” she said.

According to Malmhake, alcohol consumption in Ireland has declined by nearly 20% in the last decade. “We urge the government to work with all stakeholders to develop and introduce evidence-based solutions that will address alcohol misuse instead of punishing the majority of consumers who drink responsibly, with relentless tax hikes.”

She added: “We should not be blinded by figures that show Irish food and drink exports reaching almost €10 billion last year. The question we must now ask is how sustainable is this growth without a solid local market in which to support home grown brands such as Jameson and to develop new market entrants.”

+ The total spirits market in Ireland declined by 7.4% in 2013.

+ The continued decline in the on-trade (-5.7% volume for spirits) and off-trade (-8.1% volume for spirits) combined with the excise increase (15% on spirits) in October has had a hugely negative impact on the spirits industry in Ireland, according to Irish Distillers. A further deceleration of 9.6% can be seen in the six months ending 31 Dec, 2013.

+ Ireland has the third highest excise on spirits in the EU with approximately 66% of the cost of a bottle of whiskey going to the Exchequer.

+ The total wine market declined by 8.6% in 2013. The decline was seen in the on-trade (-2.9% volume for wine) and off-trade (-8.8% volume).

+ Ireland has the highest levels of excise on wine in the EU with approximately 50% of the cost of an average bottle of wine going to the Exchequer. (13/02/14)

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