Ireland: Big Alcohol Lobbies For Massive Tax Break

The Big Alcohol lobby in Ireland is pushing the government for a tax break to safeguard their private profit interest. Public health experts and community activists have spoken up against this proposal.

The two pub groups of the “Licensed Vintners Association” and “Vintners Federation of Ireland” as well as “Drinks Industry Ireland” have joined to push for a dramatic cut in VAT charged on pub beverage sales from 23% to 9%. The Restaurants Association of Ireland which opposed this call for a VAT cut is lobbying for their own demand of a 5% “composite” VAT rate on alcohol and food sold together as meals.

As Alcohol Action Ireland pointed out in their letter against the proposals by Big Alcohol, published on the Irish Times, reducing cost of alcohol amidst the existing heavy alcohol burden and the ongoing pandemic would be irresponsible. Over 2700 Irish people die every year due to alcohol-related causes.

When excise tax duties were reduced by 20% in Ireland, in the previous economic recession in 2010, the result was a 5.5% increase in alcohol consumption.

The Big Alcohol lobbies were quick to retaliate by saying the VAT cuts requested are only for businesses and not consumers. Essentially, consumers would buy alcohol at the same price as before COVID-19 but businesses would pocket the extra money saved from the tax cuts.

The alcohol lobby groups are basing their VAT cut proposals on the argument that their businesses have suffered the most due to COVID-19 and would be some of the last to open if they are allowed to open. Bringing up the livelihood argument is as always one of the major strategies of Big Alcohol when trying to use crises for their own advantage.

Even if the VAT cut proposed won’t affect consumers it will still be a heavy economic burden on the Irish government. As it is, alcohol tax revenue does not cover the cost of alcohol harm in the country. Every Euro gathered in alcohol excise duty in Ireland is met with €3 of public expenditure to manage the impact of alcohol harm.

The Irish government is facing increasing pressure from the Big Alcohol lobby groups to give special treatment to the alcohol industry. Considering the alcohol harm in the country and that existing alcohol tax revenue does not cover the cost of the massive alcohol burden in Ireland, it would be counter-productive and against the public interest to cut taxes so that the industry can profit from public funds at the cost of economic sustainability and public health.

Sources:

The Irish Times:

Cutting VAT would add to alcohol crisis

VAT cuts are for businesses – consumers will still pay the same

Alcohol VAT rate and licensed trade