by Monica Murphy
Ireland’s minister for finance, Brian Lenihan Jr, has brought down an early budget, announced last week. The budget was anticipated to be a harsh one, in the face of the global banking crisis plus Ireland’s big property down-turn, and this has proved to be the case.
In comparison to the deeply unpopular health and education cuts, which have caused a major political crisis, the massive duty increases imposed on wine and alcopops almost paled into insignificance and have remained remarkably uncontested. But the increases are significant: €0.41 per 75cl bottle on still wine and €0.83 per 75cl on sparkling wine.
Historically, Irish tax on wine has been very high and it has taken ten years without a hike to come near UK tax levels. Cross-border smuggling from Northern Ireland had almost been stamped out, but could resume again in the face of these increases.
Spirits and cider were hit very hard by tax increases in 2002 which had a marked downward effect on consumption. Beer appears to have escaped on both occasions, most likely due to the fact that it is an important indigenous industry, and would hurt ‘Joe Six-pack’.
Wine has increased its market share to 21%, while beer has fallen to 49% (from 57%) Wine is no longer seen as a middle-class tipple, being available now in every pub and an important part of the supermarket basket.
A premium level major brand in a supermarket will now rise from €8.99 to €9.75. In an average restaurant, an equivalent house wine will increase from €18 to €20.
