Wine duty increase

At midnight 15th of October 2013, 50c was added to the tax on a bottle of wine, less than a year after a previous increase of €1 was added to the costs. The 2012 increase represents a 41% increase in duty (according to the Irish Wine Association), and this years 50c adds a further 20% increase over the 2011 rates (or thereabouts!). So, in the space of 2 years, tax rates have gone up by almost 2/3, a massive increase…

This graph from Gavin Quinney was before the latest increase here in Ireland, and shows just how high our Duty rates are when compared with the rest of Europe, and thats before any VAT is added on at a further 23% on top of all the other costs…

Now, many people will ask, sure what is all the fuss about, wine is a luxury item?  That kinda misses the point – WINES ARE A PRODUCT SOLD BY BUSINESSES – 99% of wine businesses (importers/wholesalers/retailers/restaurants/wine bars) started business without any state support whatsover to get up and running, mostly family businesses and SMEs – the so called backbone of the economy that the various Government spokespeople say are critical to Ireland getting out of the economic mess we are in.

So, you would think that any changes to the fundamentals of how those businesses operate would be done with kid gloves, wouldnt you?? Not so – far closer to the iron fist!! When you consider that the Excise Duty now equals the average cellar door cost of the bottle of wine (i.e. the price to the importer before transport etc), you get some idea of the scale of the problem.  Put it another way, a bottle of wine selling at €15, around €6 of that is either excise or VAT…

Dont get me wrong, we love the wine business – we love that it is one of the oldest traded commodities in the world, that a piece of Mediterranean sunshine can be captured in a bottle, with lots of proven health benefits (as long as its in moderation!). That we get to meet great people with a passion for what they are doing – all the way along the line from producer to consumer.  But, if we and others like us cant survive in todays business and tax environment then Irish society will be worse off and there simply wont be an independent wine sector in this country. And the big supermarkets will have killed off another slice of the retail trade…

This entry was posted in Wine Industry commentry and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.