Taxes on drink are 'too important' to struggling economy
IRELAND can't afford to increase the price of drink to stem alcohol abuse and will have to wait until the economy picks up, an international research firm has forecast.
Business Monitor International (BMI), one of the leading independent suppliers of raw data and forecasts to the multinationals and financial institutions, suggests that the Government can't overlook the importance of alcohol taxes to our overall budget.
Michael Noonan recently revealed in the Dail that revenue from alcohol in Ireland has already fallen off a cliff -- down from €1.13bn in 2007 to €826m in 2010, the equivalent of a 27 per cent drop.
BMI calculates that despite this fall, the tax revenue from alcohol per capita in Ireland is nearly €200 a year.
The agency said, in its latest Western Europe Food and Drink Insights bulletin, that while there was "clearly some political will" to address problem drinking, the new proposals published in the Misuse of Alcohol and Other Drugs report were "somewhat contradicted by the fact that the Government has recently cut alcohol taxes in response to falling revenues".
The cross-party report on alcohol misuse, launched by Junior Minister for Health Roisin Shortall, made a number of key recommendations. They included: an education programme highlighting the dangers of alcohol misuse; the end of VAT refunds on below-cost sales of drink; a ban on advertising of discounted alcohol; a ban on advertising drink before 9pm; and a total ban on advertising on social networking sites.
There was also a proposal to ban the presentation and sale of alcohol alongside groceries, confectionery and fuel as well as outlawing direct delivery of alcohol to consumers' homes.
It also calls for a ban on all sponsorship by drinks companies of sporting and large outdoor events, a ban on all outdoor advertising of alcohol and an increase in excise duties on some alcohol products.
"There is strong evidence that the price at which alcohol is sold is a determinant in promoting and selling alcohol," said the report.
The all-party report stated that a minimum price for alcohol would increase the price of very cheap drink sold in shops but not of that sold in pubs.
It is hoped this would help the struggling pub trade. Pubs are regarded as a safer, more controlled environment in which to drink than the home.
But BMI points out that in December 2009 the Government unveiled a cut in duty on alcohol with tax on pints of cider and beer falling by 12c. Duty on wine was cut by 60c a bottle and on spirits by 14c on the standard measure of a half glass.
"Given the importance of alcohol taxes to Ireland's overall budget, we think it will be very difficult for the Government to consider measures that would have a significant impact on consumption in the short-to-medium-term.
"While some of the less radical measures proposed may be adopted, we think that minimum pricing or a ban on the sale in supermarkets and convenience stores will unlikely be passed by a government whose predominant focus must surely be to cut the fiscal deficit," the BMI forecast said.