Increase to Alcohol Duty Looking Likely in Budget 2013

The government will be looking hard for any extra revenue they can find in the upcoming Budget  for 2013. Excise duty on alcohol is one target they will probably be looking at very closely.

Duty on alcohol has not risen much in the past decade. It was decreased by around 20% in Budget 2010 and has not been touched since then.
Prior to that, the excise duty on beer was unchanged since the Budget of  January 1994 . Duty on cider was last increased in Budget 2002 and on spirits in Budget 2003
Duty on wine was  last increased in the mid year October 2008  Budget by 50 cent per standard 75cl bottle.

Because of successive price increases by the trade , the value of excise duty rates on beer, wine and whiskey (when measured as a percentage of retail prices) has actually fallen since  2001. Only in the case of cider has it increased.

Worries about people buying alcohol at cheaper prices from Northern Ireland have been one reason for avoiding duty increases and actually decreasing them in 2010.  (Or maybe the government hoped if everyone drank more they wouldn’t care about the state of the economy !)

Beer , Stout and cider in Ireland have a lower rate of excise duty than most other alcoholic drinks – the average pint has about €0.37 of excise duty included in the price.
On beer with a strength of 4.2% alcohol – that works out at  15.71c per litre per 1% of alcohol. The duty on wine (12.5% strength) works out at 20.98c per litre per 1% of alcohol – and spirits work out at  31.13c per litre per 1%.

These different duty rates  attracted the attention of the EU Commission a few years ago – they pointed out it was unfair to charge more on wines that were mainly imported than on beers which were mainly made in Ireland.

If duty on beer was to increase by about 25% – it would be closer to the rate per l/% on wine.  That would mean in increase of about 10c per pint and would bring in about €73 million.  To bring the rate on beers  close to that on spirits – it would have to increase by about €0.35 a pint .

It wouldn’t look good if only beer was increased – so smaller increases on all types of alcohol are more likely.

What effect would a price increase of 50c on a bottle of wine or 20c on a pint have on your drinking habits?

2 thoughts on “Increase to Alcohol Duty Looking Likely in Budget 2013

  1. Considering that France is planning to increase tax on beer by 160%, while leaving wine alone, I don’t think worrying about what the EU Commission says is any real reason to change the way we tax alcohol.

    We have the highest alcohol duty on wine in the entire EU. We have the second highest duty on beer and spirits. If they bring those in line with wine we will be the highest taxed drinkers in all of Europe. Why should we have to pay more tax on our alcohol than anyone else? Why should drinkers be singled out to pay even more tax?

    People will travel north to get cheaper alcohol. People will buy smuggled alcohol, just as they are buying smuggled cigarettes. The government won’t get much more tax revenue and may even end up taking in less, but what will happen to I Irish businesses as people are forced elsewhere for more affordable drinks?

    Pub sales are already down 34% since 2007. These are businesses which contribute to the Irish economy, creating jobs and circulating money locally. If people buy their alcohol outside the sate, that economic activity goes outside the sate too, which is bad for all of us.

    They need to leave us alone. People can and will go elsewhere for their beer, which will hurt Ireland as a whole, not just the government tax take.

  2. Any increase in excise duties on alcohol will decimate the pub trade. It’s already t breaking point in rural areas. The cheap cost of beer in the supermarkets is probably the biggest problem for the pub trade. The consumer is winning on price but certainly paying the price in other ways.
    The pubs are going out of business.
    The government is loosing tax revenue on vat refunds to supermarkets on cheap beer and low margin.
    There are no winners.

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