Mr. Padraig Cribben:

I thank the Chairman for the opportunity to address the committee today. I am here on behalf of the Drinks Industry Group of Ireland – a membership organisation which includes pubs, restaurants, hotels and independent off-licences as well as drinks suppliers throughout the country. In my day job, I am chief executive of the Vintners Federation of Ireland representing pubs outside Dublin. I am here as a representative of the 92,000 people throughout Ireland who depend on the drinks industry for our livelihood. The simple fact is that excise increases in successive budgets have cost jobs, have made our tourist offering less competitive and have been used as a sneaky way to get more money out of struggling Irish consumers.

There are some who believe that increasing taxation on alcohol can address misuse of the product. This is not the case. Additional taxes damage the industry and do nothing to address misuse. I, and the 92,000 people we represent, want to see misuse of alcohol addressed and to this end, we have signed a pledge for the introduction of policy options to tackle misuse. These options include addressing the widespread sale of alcohol at very low prices in a meaningful way, banning price-based advertising and also introducing a statutory code on alcohol merchandising. Alcohol costs are 78% higher in this country than the European average so clearly pricing is not addressing the problem.

However, pricing is creating a huge problem for the 92,000 workers we represent. Excise increases in successive budgets have cost thousands of jobs, made our tourism offering less competitive and punished the hard-pressed Irish consumer. Since 2007, over 1,000 pubs throughout Ireland have been forced to close. These are pubs are not in Dublin city centre or Cork city centre. They are in small villages around Ireland and as representatives of the constituencies which contain these villages, I know that members are all too aware of the serious challenges currently facing our rural communities. It is no different in the pub trade. While there is no one item that can be blamed for all of our ills, the fact that 80% of the increase in the cost of a pint in a pub since 2011 has been directly caused by taxation increases does not help.

The impact is especially pronounced in rural communities where once the pub was a centrepiece of rural life. Increasingly, we see the devastating effects of rural isolation – particularly amongst older men. The huge tax rate on alcohol products in this country is leading to another unadvisable situation - a rise in the black market trade. Seizures of counterfeit alcohol are steadily rising and a number of high-profile seizures this year show that the problem is only going in one direction.

Ireland is one of the most expensive places in the world to buy alcohol products and this has been identified by tourists in Fáilte Ireland research to be one of their chief concerns about coming back to the country. The tax take alone on a bottle of Jameson in Ireland is more than the total cost of the same bottle in the US. Excise on a pint in Ireland is six times more than it is in Portugal and ten times greater than it is in Spain so it is no wonder that tourists feel as they are being price-gouged when they visit Ireland.

When the committee weigh up the arguments for and against excise tax, I hope that it will take into account the huge impact that it has on Irish jobs and Irish consumers. In terms of tackling alcohol abuse, excise is a blunt instrument that unfairly impacts on small local businesses and does not deliver on reducing harmful patterns like binge drinking. It is a sledge-hammer, not a scalpel. The Drink Industry Group of Ireland stands ready to work with Government on policies that can deliver a difference on this important issue without costing jobs in communities that can ill afford to lose them.

The 9% VAT rate has proved that tax measures can stimulate jobs through improving our image as a tourist destination. At the same time as the Government boosted the hospitality sector with this policy, it saw fit to take with the other hand through levying further excise increases and putting pubs, restaurants and hotels under severe pressure. A reduction in excise can have the same job-creating effect as the VAT cut did. It is a boost to consumer confidence and more than that, it will help curb cross-Border activity, which is in real danger of taking off once again. It will address one of the few negatives that tourists identify with Ireland. I hope that the committee take these points under consideration as it looks to make a recommendation to the Minister and I am more than happy to answer any questions that members might have.