The Government should resist pressure from the drinks industry to cut taxes on alcohol in the forthcoming budget, a campaign group has said.
And ministers could solve the financial hole left by a ban on alcohol sports sponsorship by placing a levy on the drinks industry.
Alcohol Action Ireland estimates that a levy of 1c on a standard drink would generate €30m annually, which it said was more than the industry spends on sports sponsorship every year. “We have seen in recent years that increases in excise duty have reduced alcohol consumption and generated significant additional revenue for the exchequer, while cuts in excise duty have had the opposite effect,” said Suzanne Costello, AAI chief executive in its pre-budget submission.
“Therefore, to cut excise duty makes no sense for the physical, mental or financial health of the nation.”
Ms Costello said when excise duty was cut in 2010, consumption increased 6% and excise receipts for the State fell €142m.
She said that, in 2013, consumption fell by 9.5% following an increase in excise duty, which also had the effect of increasing receipts by €150m.
“The calls for a cut in excise duty come as figures from Revenue indicate that, even following an excise duty increase in Budget 2014, there has been a significant increase in our alcohol consumption during the first half of 2014.”
She said Revenue figures for the first six months of 2014, compared to the same period in 2013, showed that sales of cider was up 8.3%, wine increased by 9.1% and beer by 2.3%. Spirits recorded a decline, of 2.3%.
She said the decline in the pub trade was being used as a rationale for calls to cut excised duties, but argued it was the sale of cheap alcohol in the off-trade, particularly by supermarkets, that was the primary cause of this.
Ms Costello said only the introduction of minimum pricing would tackle this — a policy promised by the Government but affected by legal challenges by the industry in Scotland on the basis that it breached EU competition rules.