Irish pub-goers pay more tax on pints than 25 other European Union member states and the United Kingdom, a new report has found.
Ireland has the second highest overall rate of excise tax on drinks, following just Finland and Sweden in some categories while reaching the top spot in others.
Experts are warning of the impact high excise tax will have on consumers and the hospitality industry amid the rising cost of living.
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A report, issued by the Drinks Industry Group of Ireland (DIGI) and put together by DCU economist Anthony Foley, found that Irish pub-goers pay more tax on a pint than 25 EU member states and the UK do.
It found that Ireland has the second highest overall excise tax on drinks in the EU and the UK.
In the EU27 and UK, Ireland has the highest wine excise. Fifteen EU countries do not impose any tax on wine. However, in France, the excise tax on a glass of wine is just €0.01, while it is €0.80 in Ireland.
When it comes to beer, we are in second place after Finland. Per pint of beer, the level of excise in Ireland is €0.55, in comparison to 21 EU countries that have a beer excise per pint of less than €0.20. It is just €0.05 in Germany.
Ireland places third on excise tax on spirits, behind Sweden and Finland.
As a result of the tax imposed on alcohol here, a bottle of Irish whiskey purchased at an off-licence had almost €12 added on to the price. The same bottle in Spain, despite being produced in Ireland, had just €2.69 worth of tax added.
Commenting on what the findings could lead to, Professor Anthony Foley said: “As the costs of production for drinks producers are rising and consumers’ disposable income is also diminishing, we will see a downward shift in demand among consumers which will pose a threat to the sustainability of the hospitality sector.”
DIGI is calling on the Government to reduce the rate of excise tax by 7.5% in Budget 2023. A statement from the group said: “Ireland’s high excise rates represent another high business cost for the hospitality sector and Irish consumers at a very challenging time.
“[Reducing excise tax in this year’s budget] should be the start of a programme of annual excise reductions to gradually bring Irish drinks excise tax in line with the much lower EU levels across Budget 2023 and 2024.”
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