Michael Noonan (Limerick City, Fine Gael)

I thank Deputy McNamara for raising this issue. The Revenue Commissioners is responsible for the collection of tax on alcohol products. Alcohol products tax is charged by reference to the nature of the product. The same rate of tax applies irrespective of the type of premises in which the product is sold. I am advised by the Revenue Commissioners that for this reason data is not available on the breakdown of alcohol products tax receipts between licensed premises and off-licences.

The basis on which alcohol products tax is charged means there is no loss in the yield from that tax to the Exchequer if a product is sold in an off-licence as opposed to a licensed premises. In fact, the lower prices typically associated with off-sales mean the tax incidence is higher in the case of such sales. The rate of VAT is also the same irrespective of where the alcohol is sold but the yield would be somewhat lower from the sale of a particular product when sold in an off-licence given the typically lower prices in that particular sales channel. However, the rate of VAT from any level of expenditure on alcohol is the same regardless of whether it takes place in an off-licence or a licensed premises.

Receipts from excise duties on alcohol products totalled €826 million in 2010, down from €968 million in 2009. Projected receipts for alcohol excise for 2011 are likely to show a slight increase over 2010. The excise duty on allalcohol products was decreased in budget 2010 by approximately 20%. Prior to this, excise duty on beer had remained unchanged since the budget of January 1994, apart from the introduction in October 2008 of a new 50% lower rate of excise for beers and cider of alcohol strength by volume of less than 2.8%. The duty on cider was increased in December 2001 and duty on spirits was increased in December 2002. Duty on wine was increased in October 2008 by 50 cent per standard 75cl bottle and pro rata increases were applied to related products. The Deputy should be aware that the decreases in 2010 applied across all areas regardless of where the products were consumed or sold.

It is accepted that there has been a general trend towards off-sales in recent years. High pub prices, price discounting in supermarkets, the smoking ban and the introduction of random breath testing for drivers have all contributed to this shift towards the off-trade. While this movement is excise-neutral there is a loss of VAT from sales at lower off-licence prices. A report on the Irish beer market in 2010 published by the Irish Brewers Association earlier this year indicated that in 2010 some 33.4% of beer was sold through the off-trade as compared with 28.9% in the previous year. This is in line with anecdotal evidence of a trend over time away from on-trade to off-trade.

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