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?