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Irish alcohol sales slump

Published:  02 June, 2009

A surge in cross-border shopping and crippling recession has resulted in Irish alcohol sales suffering an unprecedented tumble of over 13% in the first quarter of 2009.

Trade body, the Drinks Industry Group of Ireland (DIGI), has said that the figures have confirmed the worst fears of the industry in the Republic of Ireland.

Cross-border shopping has exacerbated a downward trend caused by recession, according to DIGI.

DIGI chairman, Kieran Tobin, revealed that spirits had been hit hardest with a massive sales slump of 19.1%.

Beer sales fell by 12.4%, cider by12% and wine by 10%.

"These are enormous and unprecedented rates of decrease and reflect the overall expectation of a very large GDP decline in 2009," Tobin said.

"Revenue Commissioners data is generally used as a measure of consumption. However, given the continuing attractiveness of cross border shopping and the scale of this decline Republic of Ireland consumers are undoubtedly continuing to source some of their alcohol products from over the border.

"Cross border shopping remains attractive even after the April UK budget because of the favourable Euro rate of exchange, lower UK VAT rate, lower UK alcohol excise levels and generally lower business and labour costs in Northern Ireland."

Tobin said that, had the Irish government further increased excise duty in last month's supplementary Budget, the situation would be disastrous.

"In fact," he said, "given the scale of the decline in overall retail sales as well as alcohol we must now begin to consider reducing excise and VAT to allow us to compete with prices available in Northern Ireland.

"Alcohol excise in Ireland is already very high by EU standards and adversely affects our international tourism competitiveness. The Commission on taxation report should take account of the comparatively high alcohol taxation in its recommendations for a reformed tax system."

Tobin said that DIGI will work with the Irish government to safeguard jobs in an industry that employs 90,000 people in pubs, clubs, off-licenses and nightclubs across the country.