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Do Not Take 62,000 Jobs For Granted, Drinks Industry Warns

Posted on 07 October 2013

Thousands of jobs could be further undermined if additional excise increases are levelled at the drinks and hospitality sector, the Drinks Industry Group of Ireland (DIGI) warned today. It reiterated its call for government to reverse the excise increase; to retain the 9% VAT rate for the hospitality sector; and to set up a Task Force to address the enormous challenges facing small Irish drinks businesses.

Peter O'Brien, Chair of DIGI said today: 'The Minister has publicly stated that this Budget will be pro-growth and pro-jobs. Increasing indirect taxes like excise and VAT is in direct contravention of this objective and will further damage employment in the drinks and hospitality sectors.

'Excise and VAT increases are particularly inappropriate in light of the recent Central Bank forecast that 2014 consumer expenditure volume would grow by only 0.4%, a far cry from the 1.1% forecasted in the Stability Pact update in April.

Consider the figures:
1,000 = number of pubs that closed between 2007 and 2012
Over 8,000 = number of pub jobs lost since 2008
25% = decline in full time bar employees between 2008 and 2011
1,200 = drop in drinks manufacturing roles in similar time period
2,000 = number of jobs VFI / LVA warn will be lost if there is another excise increase
26 = the number of counties that will be impacted by job losses
Highest in Europe = wine excise; 2nd Highest = cider excise; 3rd highest = sprits excise; 4th highest = Beer excise
#1 on Lonely Planet's what to do in Ireland list = Visit an Irish Pub

'The policy decisions by government have a direct and very real impact on the hospitality sector, these are fragile jobs that cannot withstand punitive excise increases, such as those visited upon the sector last year. VFI survey of members reported that 39% members reduced staffing levels in the first quarter of 2013. 43% of respondents reduced the working hours of existing staff.

'Government has reached a situation of diminishing marginal returns on alcohol taxation, where any increases in rates in the forthcoming Budget will not deliver the expected yields. Any increase in excise is also like to worsen economic conditions in the labour intensive pub trade, with a consequent reduction in job numbers and economic activity, in particular in areas outside Dublin.

'The alcohol industry is an employment intensive sector of the Irish economy, employing more than 62,000 people directly and supporting thousands more indirectly. These are small independent drinks companies in every small town and village across the country. These are the people that will be impacted should Budget 2014 include additional excise increases on alcohol.

'The alcohol industry is also a significant element of the Governments tourism offering as part of the Gathering, the Irish Pub and visitor centres like Guinness Storehouse and Jameson Distillery are major draw factors for international tourism. Ireland is already one of the most expensive countries in Europe to purchase alcohol; a further increase in price to the consumer will have significant implications for the tourist trade.

'Government cannot take these jobs for granted and expect the sector to survive further punitive excise increases. Excise increases contribute to the decline of the pub sector, its employment and VAT receipts, without having any impact on consumption levels of those that misuse alcohol.

'We are calling on government to reverse the excise increases and to retain the 9% VAT rate for the hospitality sector in order to allow this important sector and its employees to build a more sustainable and positive future, and to set up a task-force to help protect the future of Irish pubs and independent off licences.'

The Drinks Industry Group of Ireland
Anglesea House, Anglesea Road,
Ballsbridge, Dublin 4.

Tel. 01 668 0215  
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