RETAILERS hiked the price of spirits last month, despite the Budget's excise cuts, which should have shaved up to €4 off the price of a bottle.
The move could cost them dearly as Finance Minister Brian Lenihan has threatened to reverse cuts that are not passed on to the consumer.
New figures from the Central Statistics Office show that while excise price cuts have been passed on for beer and wine, consumers are now paying 2pc more for spirits than they were before the Budget.
Consumers should have seen a €3.95 reduction in the shop price of a one-litre bottle of vodka, whiskey or gin due to the Budget's excise and VAT cuts. Instead they have been hit with a price increase of over 2pc.
Consumer watchdogs said it was "outrageous" retailers were not passing on excise reductions.
"It is completely unacceptable and very, very poor that prices should rise instead of falling once they got the excise cuts they said were needed," Consumer Association Ireland chief executive Dermott Jewell said.
The Department of Finance said the minister was aware of the issue and officials were keeping prices under review and would take action if necessary.
Overall prices continued to fall across the economy, dropping 0.6pc in January. Annual inflation now stands at -3.9pc, meaning living costs are dropping slower than at any time in the last 10 months.
Bargain hunters would have been disappointed by the January sales, as clothes and footwear prices fell by 9pc -- compared with average discounts of 14pc in the last five years.
Ulster Bank Economist Simon Barry said this was surprising, but could reflect the fact that retailers had been forced to cut prices so much last year that they had less scope to take an axe to them in January.
Food prices were down by 8.2pc in the year, while rent and mortgages continued to fall, but petrol prices rose by over 28pc.
Dental expenses soared by 12.8pc in January alone, and by 15pc in the year.
The Irish Small and Medium Enterprises association said falling inflation should not cover up the need for the Government to reduce the costs of commercial rates, water, waste charges and energy.