Ireland: Higher beer excises expected to reduce demand for barley

Demand for barley in the domestic market will be reduced by the recent 22% excise rates imposed on beer, an Irish Brewers’ Association impact analysis study revealed on January, 29.

The association has called on the Government to reverse the budget cut at the earliest opportunity. Beer consumption is down 2% year on year in the early months of this year, with consumers paying an extra 15c in tax on each pint, versus Dec 2011. This is made up of an additional 5c in Vat plus the 10c in excise.

IBA senior executive Thomas Burke said: “The brewing sector is a significant contributor to Irish agriculture, purchasing over 170,000 tonnes of malted barley from Irish farmers each year.

“There is a huge connection between the two industries. This increase in excise, as well as the VAT, will depress demand in Ireland. The Irish brewing industry has been doing very well in international markets in recent years, but it needs to be underpinned by a strong domestic market.”

Mr Burke said the brewing sector provides over €300 mln in revenue for the State with a further €400 mln invested in the production, marketing, export and retail of beer.

IBA chairman and Diageo Ireland country director, David Smith, said the brewing industry supports over 3,000 farming families, making it one of the most important sectors within the drinks industry in terms of indigenous manufacturing.

“At a time when domestic beer consumption is falling by roughly 2% year-on-year, we estimate that the recent draconian increase in excise will put serious pressure on IBA members and will inevitably impact on those supplying the brewing industry.

“The IBA therefore calls on Government to engage with the IBA and its members and the wider agriculture sector to find a way of stabilising and protecting this very important domestic industry.”

01 February, 2013