The Drinks Industry Group of Ireland (DIGI) has said that new figures from the Revenue Commissioners for the first quarter of 2009 reveal an enormous and unprecedented decline of over 13% in alcohol sales compared to the same period last year.
DIGI Chairman, Kieran Tobin, said that these figures confirmed the worst fears of the industry that the major increase in cross-border shopping and the dire economic situation are exacerbating the trend of falling sales volumes and average consumption levels that have been established in recent years.
With little pick-up expected for the remainder of the year, Mr Tobin said that businesses and jobs were at risk across all sectors of the drinks industry, but especially in the border region.
Tobin said: “Revenue Commissioners’ data on alcohol clearances for the first quarter of 2009 show a significant volume decline of 13.2% compared with the same period of 2008.
“The largest decline was in spirits with 19.1%, followed by beer 12.4%, cider 12.0% and wine 10.6%. These are enormous and unprecedented rates of decrease and reflect the overall expectation of a very large GDP decline in 2009.
“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.
“In this regard it is extremely welcome that the Government decided not to make the situation even worse for our industry by increasing excise rates in last month’s supplementary Budget. In fact, 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.
“We are also determined to work with Government to find ways to support our industry and the 90,000 people it employs in pubs, off-licences, production units, visitor centres, hotels, nightclubs and restaurants throughout Ireland.”