Mr. Peter O'Brien:

I thank the Chairman for the opportunity to address the committee today. I am Peter O'Brien, chairman of the Drinks Industry Group of Ireland, DIGI. My day job is corporate relations director for Diageo in western Europe. I am accompanied by Ms Marie Byrne, entrepreneur, who is in the process of establishing a new whiskey distillery in the heart of Dublin's Liberties, and Mr. Willie Masterson, who was last year's champion malted barley farmer. We are here as representatives of the 92,000 others like us throughout Ireland who depend on the drinks industry for their livelihood and to talk about ways in which this influential committee can seek to support the drinks industry as we look to the future with a lot of excitement and ambition.

I will give the committee a brief overview of the drinks industry in Ireland before we use the opportunity provided to us to focus in on the significant opportunity that exists for Irish whiskey at present and what that means for the agricultural economy in this country.

Broadly, the drinks industry can be split into two parts: manufacturing and distribution, which includes the retail and wholesale sectors as well as the on-trade and off-trade. The distribution side is extremely employment intensive and acts as a centrepiece of communities throughout the country. However, the manufacturing side will be of greater interest to the members as this is the side of the industry which provides demand for 50,000 apples, 200,000 tonnes of barley and 300 million litres of milk every year. These purchases support the livelihood of 12,000 farm families throughout Ireland and are a vital part of the agricultural economy of this country.

In recent years, Ireland has seen a decline in the overall number of manufacturing jobs in the economy as the country moves towards a more service-based economy. In contrast, the drinks manufacturers have been looking to invest in Ireland over recent years. My company, Diageo, is looking forward to opening its €168 million refurbishment of St. James' Gate and the new brewhouse in September, and our colleagues in Jameson have recently completed a €200 million upgrade to their Midleton production site. However, projects of this scale are being called into question by the Government's repeated targeting of alcohol taxes come budget time. When assessing the viability of investing in Ireland, global boardrooms use tax as a critical determinant of the business situation and, unfortunately, Ireland's alcohol tax policy is now deemed hostile by many.

It is not hard to see why these global boardrooms might be wary of Ireland's recent decisions on alcohol tax. In less than 12 months, between December 2012 and October 2013, the Government increased excise on beer by 44%, on spirits by 37%, and on wine by 62%. A report by EUROSTAT last week showed that hard-pressed Irish consumers are now paying the highest alcohol prices in Europe, although it should be noted that this is not through any action by the drinks industry. The average Irish drinker drinks the same as the average German drinker. In Ireland, such a drinker pays €733 a year in alcohol related tax while a comparable drinker in Germany pays €302.

The drinks industry in this country has a rich heritage and there is a strong commitment to supporting local producers. A recent DIGI report identified that the drinks industry purchases a far greater share of its inputs locally than other industries. In 2013, the drinks industry spent €1.1 billion on Irish produce, most of which was on barley and milk from quality Irish farms like the one run by Mr. Masterson.

I will now hand over to Ms Byrne, who will give the committee a flavour of the exciting opportunities facing the drinks industry in Ireland over the coming years, particularly in relation to Irish whiskey.