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Wednesday 26 October 2016

More than half price of bottle of wine goes to Government in tax

Published 01/06/2015 | 02:30

The Government now takes over half the price of a bottle of wine in tax.

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Over €5 from a typical €10 bottle goes in excise duty and tax and this has soared by 35pc over the last four years.

Off-licences are now demanding a reduction in the tax on wine, which they say is 624pc higher than the average in the EU.

Evelyn Jones, who owns The Vintry off-licence in Rathgar, Dublin 6, said that high excise is squeezing the quality out of wine.

"It's extremely difficult to source quality wine that can sell for €10 a bottle, which is a price-point many people seek," she said.

While a few years ago €6.27 out of a €10 bottle would go to the wine itself, the increased tax take has now reduced that to just €4.94.

That has to be shared between retailers, wholesalers, distributors, shippers and bottlers, meaning as little as 50c goes on the actual wine itself, and there are very few small-scale producers who can supply a quality product for that, she said.

Health campaigners are strongly opposed to reductions in tax on alcohol, citing the widespread problem of excessive drinking in Irish society. Revenue figures for early 2015 show a 5pc increase in alcohol consumption in the first quarter, with wine sales up 6pc, and campaigners have warned against slipping back to the binge drinking levels seen during the Celtic Tiger years.

However, Ms Jones, who is also government affairs director with the National Off-Licence Association (Noffla), said that reducing excise would allow people drink higher quality wine. She said the introduction of minimum unit pricing would put a floor on how low prices would go, so reduced excise would merely allow better quality wine be sold for the same price.

"We believe the Government has been cherry-picking wine for higher excise than beer or cider, simply because it's not produced here, yet it's an artisan product and higher quality encourages people to drink it differently, whereas they end up drinking the low quality stuff like it's lemonade," she said.

Noffla launches its pre-budget submission today, calling on the Government to reduce excise levels on wine to the same level as cider and beer, as currently it's €0.82 dearer per bottle. It also wants a ban on below-cost selling of alcohol to stop supermarkets reclaiming the Vat on this, which it said would save the State €24m a year.

Irish Independent

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