'There will be lots of vans coming across the border selling wine'
WINE drinkers took a hit again with an extra 50 cent excise going on a bottle of wine, in a move which local wine merchant Alan McGuinness believes will actually see less money going into Government coffers.
'Within the past ten months, there has been a €1.50 increase on a bottle of wine and the result is that less stock is being taken out of bond, which means that Revenue didn't get the figure which they had expected. It also resulted in a corresponding decrease in VAT returns.'
Quoting Einstein, he said: 'Insanity is doing the same thing over and over again and expecting different results and yet they go and do the same thing and increase excise.'
The result of this year's budget will, he fears, be a drop in sales here and the prospect of shoppers going across the border.
'When the last government reduced the excise duty and VAT on wine to parity with the UK there was significant growth in business.
'Now, with excise going up, the gap between northern and southern prices is going to get wider again. There's going to be a lot of unmarked vans coming across the border, calling at wee shops and restaurants, selling wine.'
The increase also hits disproportionately at the wine drinkers with modest budgets as the 50 cent increase goes on all wine, from discount bottles to expensive vintages.
'In the last ten months the government take on a bottle of wine on duty and VAT on Duty has increased from €3.65 to €4.65 to €5.15,' said Alan. 'Accordingly, the value of the wine in a bottle selling at €10 decreased from €2.40 to €1.40 to 90 cent. It is incredible that the wine which costs the producer less than €1 end up costing the consumer 10 times that.'
While many people will continue to spend the same amount on wines as before, there will be a major reduction in the quality of the wine which they are buying.
Alan pointed out that the increase in Excise Duty on wine will also affect the hospitality trade, undermining the benefits achievement by the nine per cent VAT rate.
'The politicians may say that the increase is part of the campaign to encourage responsible drinking but the real problem lies with supermarkets selling cheap slabs of beer and alco-pops,' he says.
With the duty on wine in Ireland exceeding the European average by over 600 per cent the feeling within the trade is that wine is being targeted as it is a non-domestic product.