Surprise duty hike sparks Irish wine rush

Irish off-licences were swamped yesterday as customers rushed to stock up before a surprise €1 per bottle wine duty hike came into force at midnight.

Irish finance minister Michael Noonan

The country’s finance minister Michael Noonan announced the increase yesterday afternoon as part of his 2013 Budget, with which he hopes to generate €1.25 billion in tax revenue for the beleaguered Irish economy.

His announcement also included the news that duty on pints of beer, cider and spirits measures would increase by 10 cents.

“It’s been crazy, extremely busy, it hasn’t stopped,” Paul Foley, co-owner of The Corkscrew, told Bloomberg as the Dublin city-centre wine merchant reported a week’s worth of trade in one afternoon.

Despite this short-term boost, the Drinks Industry Group of Ireland expressed “extreme disappointment” at the government’s decision, claiming that it would exacerbate the estimated 40,000 drinks industry jobs lost since the start of the recession in 2008, as well as the sales decline of over 35% seen across Irish pubs and bars.

“In this context,” warned DIGI chairman Kieran Tobin, “the excise increases announced today simply further the burden on pubs, bars, restaurants, hotels, and independent off-licences and put more jobs, businesses and livelihoods at risk. This directly contradicts the Minister’s stated aim to support job creation and small business.

“It will also act as a major disincentive for the Irish public and visitors to spend money in the wider hospitality sector that remains a crucial part of the economy, while simultaneously encouraging consumers to travel to Northern Ireland to purchase alcohol and other goods.”

There was a similar outcry from the Restaurants Association of Ireland, which described itself as “dismayed” with the 2013 Budget and criticised the government for failing to tackle below cost alcohol sales.

Calling the decision “very short sighted”, Adrian Cummins, chief executive of the RAI, said: “The increase in excise duty is another burden restaurants don’t need. One euro on a bottle of wine will bring a lot of restaurants to their knees.

“Most restaurants are simply struggling to survive, especially those outside the major cities. Budget 2013 was not what they needed to see before Christmas.”