THE €1 excise tax hike on a 75cl bottle of wine was attacked last night by the hospitality industry – but welcomed by health campaigners,
Restaurant owners said the increase was "savage", "irresponsible" and "jobs-negative" as consumers rushed to buy wine before prices went up at midnight.
The hike was the steepest in the increases on the 'old reliables' of alcohol and cigarettes.
Meanwhile, the Irish Heart Foundation complained that the 10c increase on a pack of cigarettes didn't go far enough, describing it as "paltry".
Finance Minister Michael Noonan began his announcement on excise duty by throwing a bone to motorists, saying: "I am not increasing excise duty on diesel and petrol." However, he also announced the following hikes:
* A 10c increase on the price of a pint of beer or cider, or a measure of spirits.
* Increases on other alcohol products.
* A 10c increase on 20 cigarettes and 50c on packs of rolling tobacco.
The Irish Wine Association described the increase on a bottle of wine as "as disproportionate and excessive" and said it was "absolutely contrary" to the Government's stated aim of supporting small businesses.
IWA chairman Philip Robinson said: "The imposition of such a draconian excise increase will be devastating to the domestic wine market."
He said: "One euro on a bottle of wine will bring a lot of restaurants to their knees." Evelyn Jones, of the National Off-Licence Association, said the the hike was an "irresponsible decision".
She said that it would drive shoppers to buy wine in other countries, including heading north of the border to destinations like Newry.
The Vintners' Federation of Ireland said the increase was "a crude excise hike" that was "jobs-negative".
It said that the Government had "taken away any slim hope that our members and the 50,000 people employed in the on-trade may have had".
And the €1 hike appeared to provoke an extraordinary reaction from consumers last night with wine shops and supermarkets reporting a rush to buy stock before the midnight price increase.
However, Alcohol Action Ireland welcomed the tax increase on drink.
Its director, Fiona Ryan, said: "Pricing is one of the most effective ways a government can reduce alcohol consumption and the associated harms.
"To put the estimated €200m in potential revenue from this duty restoration in perspective, alcohol-related harm costs the State an estimated €3.7bn a year."
However, Chris Macey of the Irish Heart Foundation expressed his disappointment with the 10c increase on cigarettes – which will see the cost of a pack of brands like John Player Blue or Marlboro Lights rise to €9.30.
He called the tax rise "paltry" and accused the Government of falling for "self-serving tobacco industry propaganda that tax increases fuel smuggling".