Irish indies struggle against duty rise

Wine sales in Ireland plunged by almost 10% last year following the implementation of Europe’s highest wine excise duty rate.

Michael Foley of the IWA said smaller wine merchants are being pushed to the brink.

According to the Irish Independent, 8.2 million cases of wine were sold in Ireland in 2013 representing a drop of 700,000 on the previous year.

However, despite the fall in sales, excise receipts soared from €231m (£185m) to €302m (£242m) over the same period.

The shift followed a rise in the duty on a 750ml standard bottle of wine of €0.5 (40p) in the 2014 budget which, in turn, followed a rise of €1 (80p) in the previous budget.

The 2014 budget was effective as of October 15, 2013 and means Ireland now has the highest wine excise duty in the EU at €3.48 (£2.78) a bottle.

Speaking to the Irish Independent, Michael Foley, Chairman of the Irish Wine Association (IWA), said: “The last number of years have been extremely challenging for Ireland’s wine industry and penal excise increases of 62% over the last two budgets have pushed the industry to the brink.”

And with a 59% increase on a bottle of €8 (£6.4) compared to a 32% increase on a bottle costing €23 (£18.4) Foley said it was consumers and smaller wine retail operations who were feeling the impact: “As well as being a tax on hard-pressed consumers, these increases have put a huge strain on the thousands of small businesses across Ireland that sell wine.”

The IWA says the duty increases hit cheaper wines disproportionately (Source: IWA)

As the independent merchants lose ground to the supermarkets and chains Paul Walsh, owner of the Black Pig wine merchant in Donnybook, County Dublin said they “miss out on a younger cohort” of customers seeking cheaper wines as the excise increases have caused them to vastly reduce their offerings of wines under €10 (£8).

According to Walsh: “There’s no doubt that it’s affected the business, the old market of having a bottle of wine at a price point of €9.99 (£8) is becoming impossible to hit at a quality level that I’m willing to sell.”

“”I have two or three different bottles at that price now,” said Walsh.

“I would have had an offering of at least 10 or 15, but the profit margin on these is barely €1 (80p)”

Paul Walsh said its almost impossible to find decent cheap wines with duty at the current level.

And, according to Walsh, growth in the business is falling with a year-on-year “falloff”.

By comparison, the Irish government added €0.1 (8p) to a pint of standard beer of cider, €0.1 (8p) to a standard measure of spirits and €1.97 to a standard 700ml bottle of whiskey.