October, 2013

Alcohol Action Ireland welcomes the increase in excise duty and highlights the importance of minimum pricing

Alcohol Action Ireland, the national charity for alcohol-related issues, has welcomed the decision by the Government to increase excise duty on alcohol in Budget 2014, but has warned that tax alone cannot effectively target the very cheapest alcohol products being sold in the off-trade.

“We welcome the increase in excise duty on a pint of beer or cider, and a standard measure of spirits by 10 cent and on a 75cl bottle of wine by 50 cent. Following on from last year’s increases, we believe it will help contribute to a reduction in alcohol consumption in Ireland,” said Suzanne Costello, CEO of Alcohol Action Ireland.

“Tackling pricing is one of the most effective ways a Government can reduce alcohol consumption and, simply put, if the price of alcohol goes up, alcohol-related harm – and the financial burden it places on the State – goes down,” said Ms Costello.

“We have seen in the past that increases in excise duty have led directly to a reduction in alcohol consumption, while when excise duty has been cut, as it was in 2009, our alcohol consumption has increased. This shows just how important pricing is when trying to reduce alcohol-related harm.”

However, Ms Costello pointed out that even with an excise duty increase, large multiple retailers can still sell deeply discounted alcohol, such as “slabs” of cheap beer, as a draw to attract customers, absorbing the excise duty increases and off-setting it by increasing the prices of other goods.

“Even when excise duty is increased, once the retailer pays the tax owed to the Government, they are under no obligation to pass this on to consumers, so alcohol could still be sold as a loss-leader. This is why the Government’s announcement last week that it intends to introduce minimum pricing is very welcome as it will set a ‘floor price’ for alcohol that cannot be undercut,” said Ms Costello.

“While tax affects all alcohol products and outlets – and therefore all consumers – minimum pricing directly targets the cheapest and strongest alcohol products, which are favoured by the most harmful drinkers and young people, so it will only affect the price of these very cheap products in the off-trade, primarily supermarkets, and will not have any affect the price of drinks in pubs, clubs or restaurants.

“Minimum pricing has the potential to significantly reduce alcohol-related harm in Ireland, resulting in a reduction of the substantial costs incurred by the State and the number of lives lost due to alcohol in Ireland every year. It would do this by effectively targeting those drinkers choosing the cheapest and strongest alcohol products, who would benefit most from a reduction in their consumption, while having little or no effect on low-risk drinkers.”