Cross-border shopping and the economic downturn sent wine sales tumbling by more than 10% in Ireland during the first quarter of 2009, official figures show.
Now trade body the Drinks Industry Group of Ireland (DIGI) is calling on the government to consider reducing excise duties and VAT – and warns that jobs and businesses are at risk all over the country.
Alcohol sales were down 13.2% in the first quarter, with wine sales falling 10.6%. Spirits sales slumped 19.2%, while for beer and cider the declines were 12.4% and 12.0% respectively.
DIGI chairman Kieran Tobin blamed the falls on the ‘dire’ economic situation and a ‘major increase’ in cross-border shopping with Northern Ireland.
‘Cross-border shopping remains attractive even after the April UK Budget because of the favourable euro rate of exchange, lower VAT rate, lower alcohol excise levels and generally lower business and labour costs in Northern Ireland,’ he said.
Tobin welcomed the standstill in excise duty rates in April’s supplementary budget, but warned that further action might soon be necessary.
‘Given the scale of the decline in overall retail sales as well as alcohol, we must now begin to consider reducing excise and VAT to allow us to compete with prices available in Northern Ireland,’ he said.
Written by Richard Woodard