Written answers

Tuesday, 19 January 2010

9:00 pm

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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Question 240: To ask the Minister for Finance if his attention has been drawn to losses incurred by a small wholesaler of wines and spirits (details supplied) as a result of the downward change in excise duties; and if he will make a statement on the matter. [48550/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy will be aware that some difficult choices had to be made in framing recent Budgets. The Government has over the past 18 months made very significant budgetary adjustments including those announced on 9 December last. Those reductions had to be made in many areas, including reductions in Social Welfare expenditure, cuts in public service pay rates and the deferral, reduction or withdrawal of various schemes, to mention just a few.

Despite having to make those considerable reductions in other areas, I nevertheless, following requests from the drinks industry, decided to make reductions in alcohol excise duty. The reductions were designed to provide some relief to the business community, but represent a significant concession which is projected to cost the Exchequer some €90 million in a full year. Consequently, to provide further relief to the drinks industry as is now being suggested is out of the question.

In that regard, I would also point out that in my Budget speech, I stated that "I expect the drinks industry to play its part in making the cost of alcohol more competitive. There was no burden placed on traders to reduce prices immediately following Budget night. I would hope that those involved in the drinks industry would be able to find some arrangement with individual traders, and between the various sectors of the industry, to balance out any effects of the excise reductions.

I want to take this opportunity to re-confirm that the reductions in excise duty apply to stock taken out of bond on or after 10 December 2009, and that no compensation will be given by the Exchequer to traders in respect of stock purchased before 10 December 2009.

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