Tuesday 19 November 2019

Impact of hard Brexit on drinks and hospitality sector could cost the Exchequer €135m - report

(stock photo)
(stock photo)
Ellie Donnelly

Ellie Donnelly

The impact of a hard Brexit on Ireland’s drinks and hospitality sector could cost the Irish Exchequer €135m annually.

This is according to a report published by the Drinks Industry Group of Ireland (DIGI).

As the March 2019 deadline for the UK to leave the European Union looms, the 'Economic Impact of Brexit on the Drinks and Hospitality Sector' report found that the lost revenue would result from a combination of hard Brexit-related factors, including reduced drinks exports to the UK, reduced British tourism, and an increase in cross-border shopping.

Drinks exports to the UK have already decreased, dropping 11pc in the first half of 2018 alone, according to the DIGI. This comes on the back of a decrease of 7pc between 2015-2017, the lobby group added.

Many Irish drinks products are heavily reliant on the British market, with more than 70pc of all cider exports, and 43pc of all beer exports from Ireland going to the UK.

Difficulty accessing the British market due to new tariffs, an increase in wait times at the Border, or other costly barriers will eat into the margins of drinks producers, especially micro-breweries and distilleries, the report has found.

Meanwhile, a more attractive euro-sterling exchange rate could lead to an increase in cross-border shopping.

DIGI’s report estimates that if Republic of Ireland citizens travel to Northern Ireland to purchase drinks products, businesses and government here could lose out on as much as €60m worth of expenditure.

Rosemary Garth, chairperson of DIGI and director of communications at Irish Distillers, said that while the negative effect of Brexit has been presented in terms of the medium and longer term, "we’re concerned about the immediate and short-term effects which are already being felt by the drinks industry."

To counteract the effects of a hard Brexit on the drinks and hospitality industry, ahead of Budget 2019, DIGI is calling on the Government to reduce alcohol excise tax.

Ireland has the second-highest level of excise tax on alcohol in the EU.

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