10c increase on drink could raise €140m to save lives

Alcohol Action Ireland, the national charity for alcohol-related issues, urged the Government in the run-up to next week’s Budget, to consider a modest 10c increase on alcohol – an increase that could raise €140million for health including providing the cervical cancer vaccine for all 12-year-old girls in the country and a 24-7 social work service.

Director of Alcohol Action Ireland, Fiona Ryan said: “To translate that 10c into real lives:   €9.7milllion would fund the vaccination of 12-year-old girls against the virus that causes cervical cancer; €15million would fund an out-of-hours social work service for children and families in crisis. Just €7million would fund special needs classes for the 534 vulnerable children with mild learning difficulties whose needs will now not be met as a result of education cuts.

“The tax short-fall this year is liable to run to €3 billion which will impact on vital services in health and social care. By putting a very modest 10c increase on a pint, or glass of spirits or even a bottle of wine we could raise €144.4million for the Exchequer. 10c is a very modest increase under the dire national circumstances we are battling against.”

Ms Ryan referred to the reported fall-off in alcohol consumption for 2008:

“Our reported consumption drop in alcohol brings us back to the levels we were drinking at in 1997/1998 which is still reckoned to be 20% higher on average than our European counterparts. Even that 1997/1998 level we are still drinking the equivalent of 490 pints or 129 bottles of wine 46 bottles of vodka per adult. It is worth remembering that our alcohol consumption in 1997/1998 increased 20% on the previous decade before rising again to a record high. Our consumption rates are falling but they are falling from a record high.”

Some facts on alcohol and tax

  • Ireland does have among the highest rate of taxes on alcohol in the EU but our alcohol is also among the most affordable as a proportion of wages. A recent report from the European Commission’s Department of Health and Consumer Affairs also shows that Ireland is one of the six countries in the EU where the affordability of alcohol has increased by 50% or more since 1996. In other words alcohol as a percentage of wages had become more affordable over the past 12 years.
  • In the past 15 years, there have only been three increases in excise duty – cider (2001), spirits (2002) and wine (October 2008), the last excise duty increase on beer was in 1994. Successive price increases have largely been trade/ industry led which means that increased profits have gone to trade and industry while the proportion of tax (vat and excise duty combined) going to the public coffers has actually fallen. Take beer for example, tax as a percentage of price fell from 37% in 1994 to around 29% in 2007.
  • In reality the number of pubs[i] in Ireland has actually increased since the beginning of the decade from 7,500 to 9,500 at the end of 2008: there are an extra 2000 more pubs in existence today.
  • According to the Revenue Commissioners annual reports, 7,500 pub licences existed in 2000. In 2001, however, as a result of a change in licensing laws, more than 11,000 pub licences were issued by Revenue. Following this statistical spike, there was a sharp fall with 1,400 less pub licences by the end of 2002 as the market settled. It should be noted that this market shift occurred in 2002 at the height of the boom and before the introduction of the smoking ban.

Likewise, there has been massive growth in the off-sales sector most notably with the advent of retail multiples entering the market.

Department of Finance Tax Strategy Group Projections on a 10c increase

In 2007, the Department of Finance’s Tax Strategy Group calculate 10c increase on alcohol would yield €144.4 million for the Exchequer:

 ·                 An increase of 10 cents on a pint of beer could yield €83.1m

 ·                 An increase of 10 cents on a half glass of spirits could yield €42m

 ·                 An increase of 10 cents on a pint of cider could yield €12.7m

 ·                 An increase of 10 cents of a bottle of wine could yield €6.6m


The revenue raised from just a 10c increase could fund:

 ·                 €9.7m would fund the vaccination of all 12-year-old girls against a virus that causes cervical cancer

 ·                 €15 m would fund a national out-of-hours social work service for one year

 ·                 €7 m would fund special needs classes for the 534 vulnerable children with mild learning disabilities whose needs will not now be met as a result of education cuts earlier this year

 ·                 €145m would provide all children with a free pre-school place for one year on a half-time basis. The place would provide quality, early childhood education and care, investing in our future workforce, and in the potential of all to participate in civil society (NESF costing)

A proportion of the additional revenue could be ring-fenced to fund the implementation, monitoring and evaluation of our potential new national drug and alcohol strategy.  

For more information contact:

Fiona Ryan: 087 2195723/ (01) 878 0610



[i] On-trade accounts include pubs, bars, hotel bars and nightclubs