Decision not to increase excise on alcohol a ‘lost opportunity’

Alcohol Action Ireland, the national charity for alcohol-related issues, today described the decision not to increase excise duty on alcohol in the Budget today as a lost opportunity to yield revenue for vital health and social services, as well as reducing the harms caused by alcohol use.

Director of Alcohol Action Ireland, Fiona Ryan said: “A modest 10c increase on alcohol could have raised much needed revenue. To translate that 10c into real lives:   €9.7milllion could have funded the vaccination of 12-year-old girls against the virus that causes cervical cancer; €15million could have funded an out-of-hours social work service for children and families in crisis. Just €7million would have funded 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.”

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

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. Take beer for example, tax as a percentage of price fell from 37% in 1994 to around 29% in 2007.

Successive price increases over the past 15 years have largely been trade and industry led which means that an increasing proportion of the price of a drink have gone to trade and industry while the proportion of tax (VAT and excise duty combined) going to the public coffers has actually fallen.

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

“Our reported consumption drop in alcohol brings us back to the same levels we were drinking in 1997/1998 which is still reckoned to be 20% higher on average than our European counterparts. Even at 1997/1998 levels we are still drinking the equivalent of 490 pints or 129 bottles of wine or 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 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 calculated a 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



For further information or comment contact:
Alcohol Action Ireland
Tel: (01) 878 0610


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