Irish consumers are paying more excise tax on their glass of wine than anyone else in the European Union, and it’s not just consumers that are getting burned; restaurants, bars and off-licenses are suffering too, according to the Drinks Industry Group of Ireland (DIGI).

When consumers sit in a bar or beer garden to enjoy a glass of rosé, they pay 80 cent excise tax on a standard glass (187ml); compared to four cent per glass in Greece; and one cent for the equivalent in France.  If they were to enjoy that glass in one of fourteen EU countries, such as Spain or Italy, they wouldn’t have paid a cent of excise tax.

When VAT is applied in addition to excise, 34% of the cost of a glass of wine goes to the government in taxes in Ireland.

Even if consumers avoid the sun and stay in, enjoying a glass of wine at home has also become an increasingly prohibitive luxury. When an Irish consumer purchases a €10.50 bottle of wine in an off-license, €5.12 will go to taxes through VAT and an additional excise tax – almost half of what they spent.

Successive excise tax increases in Budget 2013 and 2014 (excise was raised by €1 in 2013 and 50 cent in 2014) have seen the excise tax on a bottle of wine purchased in an off-license rise to €3.19, making it the most expensive in the EU. This excise rate compares to €2.54 in the UK and three cent in France.

The successive tax increases have not benefited Ireland’s wine industry, which affects 210,000 jobs in the wider hospitality sector. Since wine is not produced in Ireland, the costs of importing are compounded by excise tax for importers.  For these businesses, cash-flow is often a major problem: in most cases, importers must pay excise tax on wine cases as an up-front cost.

Commenting, Donall O’Keeffe, Secretary of DIGI and Chief Executive of the Licensed Vintners Association said: “While Ireland is not a wine-producing country, we are a nation of wine drinkers supported by a network of long-established wine importing and distribution businesses. Our punitive wine excise tax – the highest in the EU – slows the growth of these businesses and impacts their day-to-day operations and bottom line.

“Ireland has a rich heritage of exporting world-famous drinks and drinks businesses around the world, with profound economic and cultural benefits. However, our overall alcohol excise tax— the second highest in the EU—is stunting the long-term sustainability of this important industry, which supports 210,000 jobs nationwide.

“DIGI is calling on the Government to reduce Ireland’s high rate of excise tax. A reduction in alcohol excise tax will encourage the growth of our drinks and hospitality sector, return money to Irish consumers and make Ireland more competitive internationally.”