Restore excise duty to 2009 levels and raise €200 million

Alcohol Action Ireland, the national charity for alcohol-related issues, is calling on the Government to restore excise duty on alcohol to 2009 levels in next week’s Budget.

The previous Government slashed excise duty back in 2009 because of fears of cross-border shopping, but a restoration of excise duty to 2009 levels would net the Exchequer almost €200 million and would also help to significantly reduce the huge costs borne by the Irish taxpayer due to alcohol-related harm.

Director of Alcohol Action Ireland, Fiona Ryan said: “Cheap alcohol costs Ireland €3.7 billion each year, including a bill of €1.2 billion for alcohol-related crime and a further €1.2 billion in healthcare costs. To put €3.7 billion from alcohol-related harm into perspective – obesity is costing us less than one third of that figure €1.1 billion.”

To restore excise duty to 2009 levels there would have to be a 10c increase on pints of beer and cider (yielding €81 million), a 12c increase on standard measures of spirits (€43.5 million) and a 49c increase on a bottle of wine (€34 million). When VAT is included this will result in an estimated increased take from drinks tax of almost €200 million.

Ms Ryan said: “The previous Government slashed excise duty as a short-term measure to stop cross-border shopping when the Euro was almost on par with Sterling. That situation no longer exists and the decision on excise duty must be reversed.

“The fact is we cannot afford our €3.7 billion a year drinks bill and we know from the World Health Organisation that tackling pricing is one of the most effective ways a Government can reduce alcohol consumption and the associated harms, which is why we would also urge Government to introduce minimum pricing as a priority. 27 national organisations now support the call for minimum pricing – a floor price beneath which alcohol cannot be sold.”

The Minimum Pricing Coalition, founded by Alcohol Action Ireland, includes Barnardos, ISPCC, Focus Ireland, St Vincent De Paul, The Samaritans, The Family Support Network, The Rise Foundation, Women’s Aid and the Rape Crisis Network of Ireland, Alcohol Forum, St Patrick’s University Hospital, the Rutland Centre, the Irish Medical Organisation, the Royal College of Physicians of Ireland (Faculty of Public Health Medicine), the College of Psychiatry of Ireland, Citywide Drugs Initiative, Ballymun and Clondalkin Drugs Taskforces.

Ms Ryan said: “As it stands, a woman in Ireland can reach her low risk maximum weekly drinking limit for €7 – that’s less than an hour worked on minimum wage (€8.65) – and a man can do it for less than €10. The upcoming Budget is going to be about tough choices. The Government has an opportunity to make almost €200 million here, instead of potentially making cuts to much-needed front-line services.”

The National Substance Misuse Strategy Steering Group Report, published earlier this year, states that increasing excise duties is one of the most effective methods of reducing alcohol consumption, pointing out that price has to be a key component of any alcohol-harm reduction measures. Simply put, if the price of alcohol goes up, alcohol-related harm and its associated costs go down.

This was clearly seen in December 2002 when excise duty on spirits was subject to a significant increase, leading to a fall of 20% in spirits consumption and an overall drop in alcohol consumption of 6% - the first fall in alcohol consumption in Ireland in 16 years. However, in December 2009 excise on all alcohol products was cut by about 20%, resulting in a rise in alcohol consumption from 11.3 litres in 2009 to 11.9 litres in 2010.

Alcohol Action Ireland is calling on the Government to restore excise duty to 2009 levels and begin tackling the extensive damage caused by alcohol in Ireland, which is placing unnecessary and costly burdens on our economy, our families and our essential frontline services.

Notes
- Contrary to popular belief, there have been very few increases in excise duty on alcohol in the past couple of decades. Since 1994 there have been only three increases in excise duty – cider (2001), spirits (2002) and wine (2008). The last excise increase on beer was in 1994.
- The current excise rates on alcohol are as follows: beer and cider (per pint) – 37c; spirits (standard measure) – 44c; wine (bottle) €1.97; 33c on a can of beer or cider (500mls); 22c on bottle beer (330mls) and €8.72 on a bottle of spirits.
- The projected increased excise duty take of €158.5 million is based on estimates by the Department of Finance’s Tax Strategy Group and relates to all alcohol products sold in Ireland. Total tax take rises to almost €200 million when VAT is included.

For further information or comment please contact Alcohol Action Ireland Communications Officer Conor Cullen on 01-8780610 or 087-7530576.

Source: alcoholireland.ie