Thursday 19 July 2018

Drink firms warn cheap UK duty-free a 'disaster'

Irish shoppers could hop on a plane to the UK, once it has left the EU, stock up on duty-free alcohol and then bring it back into Ireland, with the spirits market here likely to be hit hardest, industry figures have warned. Photo: GETTY
Irish shoppers could hop on a plane to the UK, once it has left the EU, stock up on duty-free alcohol and then bring it back into Ireland, with the spirits market here likely to be hit hardest, industry figures have warned. Photo: GETTY
Colm Kelpie

Colm Kelpie

The sale of cheap, duty-free alcohol in the United Kingdom post-Brexit would be a "disaster" for the drinks industry here, it has been claimed.

Irish shoppers could hop on a plane to the UK, once it has left the EU, stock up on duty-free alcohol and then bring it back into Ireland, with the spirits market here likely to be hit hardest, industry figures have warned.

"Even if you consider the numbers of Irish returning home at key holiday periods, you're looking at significant numbers of people who will be able to purchase duty-free alcohol and bring it into Ireland," said Evelyn Jones, government affairs director with the National Off-Licence Association.

"The ironic thing is that a lot of it will be Irish production, Irish whiskey exported and then reimported."

Currently, if you are travelling to Ireland from outside the EU, the Canary Islands, the Channel Islands or Gibraltar, you can bring in goods within a duty-free allowance without paying customs duty, excise duty and VAT, according to the Revenue Commissioners.

The allowance amounts to one litre of spirits, four litres of wine or 16 litres of beer.

Evelyn Jones, government affairs director with the National Off-Licence Association. Photo: Frank McGrath
Evelyn Jones, government affairs director with the National Off-Licence Association. Photo: Frank McGrath

But there is also the potential for smuggling, suggested Ms Jones.

"Nobody remembers what it was like when we had duty-free on the Border," she said.

"I remember that when I was a child we used to go up to Donegal, when duty-free was in place, and people used to go to Strabane and do their shopping.

"You would have to put on all those clothes in the car, as you went across the Border, otherwise you would have to pay the tax on them.

"It will have a very serious impact on spirits and I would imagine in particular premium spirits, which are more expensive.

"If you are limited in terms of quantity (that you can bring in without being hit with duty), then people will go premium.

"That is happening even now. So duty-free will then be an absolute disaster."

Similar concerns have also been expressed by the Irish Whiskey Association (IWA), which warned that cross-Border and duty-free sales post-Brexit could have a major negative impact on alcohol sales here.

"The Irish Whiskey Association, as part of ABFI, has consistently warned that cross-Border sales will increase post-Brexit unless immediate action is taken to address Ireland's disproportionately high alcohol taxes," said William Lavelle, head of the IWA.

"Ireland has the second-highest alcohol tax in the EU. This acts as an incentive for shoppers to buy alcohol outside of Ireland, a problem that will be made even worse if duty-free sales are reinstated."

A spokesman for Revenue said that it was engaged in the data-based assessment of the potential impact of Brexit for Irish traders.

"Our planning is based on the full range of possibilities, including that customs controls or processes of some form will apply between Ireland and the UK," the spokesman said.

"Revenue supports voluntary compliance by targeting and delivering a proportionate and effective response to non-compliance. Tackling shadow economy activity in all its forms is, and will continue to be, a key priority in Revenue's drive to maximise compliance and protect legitimate trade."

Irish Independent

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