Mr. Adrian Cummins:

The drinks industry is a vital part of the economy with more than 92,000 jobs created in local communities throughout Ireland, be it in the local restaurant, pub, the farmer supplying products to breweries and distilleries, the local hotel and independent off-licence. Let me put it into perspective, the reduction of VAT to 9% created 31,500 jobs in totality, and some 21,600 of these jobs were in food and accommodation. Restaurateurs have been hit on two successive years by increases in duty on a bottle wine. There was a 1 euro increase two years ago and the increase last year was 50 cent. About 30% of the turnover in a restaurant is alcohol based. While we benefited from the reduction in VAT to 9%, we lost out from the increase in excise duty. Since 2012, the tax on 1,000 cases of wine, which is roughly 20 cases of wine each week, has increased by €18,000, a cost that has to be borne upfront by Irish restaurants, and other businesses in the tourism and hospitality sector. Given the situation with access to credit, the €18,000 increase has to be soaked up in cash flow, leaving less money for small businesses to invest.

What we can see from customer and tourism feedback, what tourists say when they are asked what they think about their trip to Ireland, we seem to have got it right with the value for money on food, but in the past two years when Fáilte Ireland look at the statistics, it sees a growing trend that tourists find the cost of having a drink in Ireland becoming more expensive. We are trying to compete in the international market for people to visit Ireland. There has been a low level growth in the past number of years. We have a long way to go to recover our competitiveness.

We had 1 million more tourists in 2007 than today and we have a long road ahead before recovering that lost competitiveness. We understand that excise duty is central to budgetary issues within Government. We would like excise duty reversed, however, to grow tourism and to assist the restaurant and hospitality industry in the forthcoming budget.

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 small businesses such as restaurants, pubs and hotels under severe pressure.

A reduction in excise can have the same job creating effect as the VAT cut. The extra 50 cent increase on wine last year, according to customer feedback, meant that they were hit two years in a row. This damages consumer confidence in the marketplace. A reduction would give a boost to consumer confidence and, more than that, it would help curb cross-Border activity, which is in real danger of taking off once again. It would also address one of the few negatives that tourists identify with holidaying in Ireland.

I will hand over to Mr. Donall O'Keeffe from the Licensed Vintners' Association.