TSG 13/02
General Excise Duties
(Tobacco and Alcohol Products)
Receipts from Excise Duties
1.
Receipts from excise duties on tobacco (all categories) and alcohol products totalled
€1,918m in 2012. The table below shows the full 2012 figure by category and the breakdown
for the first 6 months of 2013 compared to the same period in 2012.
Tobacco
Alcohol
Total
2012 total
yield
€m
2013 receipts
to end-Jul
€m
€m +/- over
same period
in 2012
€m +/against
profile 2013
2013 projected
receipts
€m
1,072.3
846.1
1,918.4
487.1
496.1
983.2
-3.2m
54.2m
+12.8m*
-46m
1,108.6
1,014.7
2,123.3
*The Tobacco receipts for February 2013 have been retrospectively boosted by €40.8m which was received in December 2012 and included
in the Exchequer Returns for December 2012 but was reallocated to February 2013, on foot of a recommendation from the Comptroller and
Auditor General.
When account is taken of the €40.8m tobacco receipts carried over from 2012, both alcohol
and tobacco excises are below profile at end-July 2013 suggesting an ongoing long term
downward shift in consumption patterns and/or the 2013 Budget increases are not generating
the estimated increases in revenues.
Changes in Excise Rates in Recent Years
2.
On tobacco excise, an increase of 10 cent per packet of 20 was applied in the 2013
Budget. Previous increases were a 25 cent increase in both Budget 2012 and the
Supplementary Budget of April 2009, a 50 cent increase in Budget 2009 and 30 cent in
Budget 2008 (€1.40 since 2008).
3.
The excise duty on all alcohol products was increased in Budget 2013: €1 per bottle of
wine, and 10 cent on each of pints of beer and cider and a standard measure of spirits. Excise
on all alcohol products was decreased by around 20% in Budget 2010. Prior to that, the
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 low alcohol beers and
cider), and on other products was largely unchanged since 2001. Accordingly, excise is
unlikely to be a determining factor in changing consumption patterns and levels.
Cross-Border Price and Differentials across Products
4.
Traditionally, excise products have been subject to some cross-border competition.
The Revenue Commissioners carry out a regular cross-border comparison of prices for
excisable commodities in some of the major outlets in both Dublin and Newry. The table in
Annex 1 illustrates key comparisons of prices of certain items, from the most recent survey
conducted on 3 July 2013. All prices quoted for items sold in both the State and in Northern
Ireland are expressed in euro. From that viewpoint, most alcohols are cheaper in Northern
Ireland. Cigarettes are marginally cheaper here.
Policy Approach to Excise
5. In determining the level of excise duty applicable to alcohol and tobacco products,
account is taken of factors such as health outcome, public order issues, cross-border trade and
other societal issues. It must be borne in mind, however, that in making such determinations,
1
account must also be taken of the conflicting agendas that exist in relation to the taxation
levels. For example, with tobacco excise, while the health lobby supports continuing to put
large increases on tobacco products in an effort to reduce smoking levels, the industry and
others view such increases as incentivising an increase in the already high level of smuggling.
Similarly, with alcohol excise, there is ongoing conflict in relation to how increases might
affect the on-trade in the face of the off-trade continuing to sell cheaper alcohol products.
The change in budget timetable for Budget 2014 may also impact on how any increases in
excise might be applied. Traditionally they are implemented with effect from midnight on
Budget night. Despite the change in the timetable, it is considered that this practice should
remain in place. Otherwise, traders will have a period of 2 months to stock up on alcohol and
tobacco products at old rates, negating the effect of the increase from the Exchequer’s
perspective.
2
A:
TOBACCO
6.
The current excise duty on cigarettes is €237.69 per 1,000, together with an amount
equal to 8.83% of the retail price (the ad valorem rate), or €271.91 per thousand, whichever is
the greater. For example, in the case of a packet of 20 premium brand cigarettes priced at
€9.40, the excise content is €5.58, which equates to around 59.3% of the retail price. When
one takes account of VAT, total tax as a percentage of price is 78.1%.
7. Excise increases were imposed on cigarettes (with pro rata increases on other tobacco
products) over the past number of years, as follows:
Year
Amount of Duty
Increase per pack of 20
Change in Consumption
over previous year
(Cigarettes only)
Yield €m
2003
2004
2005
2006
2007
2008
2009
2009 (Supp)
2010
2011
2012
2013
50 cent
25 cent
No increase
No increase
50 cent
30 cent
50 cent
25 cent
No increase
No increase
25 cent
10 cent
-10.3%
-15.3%
+3.4%
+1.6%
-3.6%
-8.5%
1,119.5
1,024.6
1,053.6
1,071.4
1,155.0
1,131.5
-6.7%
-10.4%
0.6%
-8.7
No change (est)
1,155.4
1,100.9
1,056.8
989.6
1,041.4
8.
Cigarettes represent approximately 92%, by value, of tobacco consumption. RollYour-Own (RYO) tobacco sales increased by 31.4% in 2012. However, they still represent a
small proportion of total tobacco sales. The excise on RYO was increased by 50 cent (VAT
included) in addition to the pro-rata increase applied following the 10 cent increase on
cigarettes in Budget 2013, bringing the overall tax increase (inclusive of VAT) on a 25g pack
of RYO to 60 cent.
Illegal Importations
9.
The current price of 20 cigarettes in the Most Popular Price Category (MPPC) is
€9.40. Until recently, Ireland had the highest tobacco tax content on, and price for, cigarettes
in the EU. However, a recent cross-border price survey carried out by Revenue indicates that
cigarettes are now marginally more expensive in Northern Ireland (approx. 6c dearer across
two popular brands compared as of 3 July 2013). In the case of Roll-Your-Own (RYO)
tobacco, or loose tobacco, the excise in Ireland on a 25g packet is €1.14 higher here than in
the UK (€6.22 compared to €5.07). The excise content of the MPPC in Ireland, at €5.58,
remains higher than the retail price of the MPPC in all but 2 of the 18 Member states that still
provide this data to the European Commission.
10.
While the data at paragraph 7 indicate a significant overall drop in cigarette
consumption, it has to be borne in mind that they relate only to cigarettes on which Irish duty
has been paid. There is both anecdotal and survey evidence to suggest that non-Irish duty paid
(NIDP) cigarettes constitute a significant proportion of total cigarette consumption here (at
least 20% - Results from the latest IPSOS/MRBI survey conducted on behalf of Revenue and
the HSE’s National Tobacco Control Office indicate that 13% of all smokers were classified
as having an illegal pack in 2012, and that a further 7% of all packs were Non-Irish Duty Paid
3
but were legal product purchased abroad). Tobacco smuggling remains significant and this is
almost certainly attributable to the high cigarette prices in this country.
11.
The total amount of cigarettes seized in 2012 was 95.6 million. Seizures in 2011
amounted to 109 million, in 2010 178 million and the figure for 2009 was 218.6 million.
Seizures to 31 July 2013 amounted to 23,929,218 cigarettes and 3,000 kgs of tobacco, with a
retail value of €12.2m. In the period 1 January to 31 July 2013, there have been 60 court
convictions for cigarette smuggling and illegal selling of tobacco products, resulting in 23
custodial sentences, 10 of which were suspended, 3 community service orders and €108,500
in fines imposed.
12.
The high level of seizures over recent years reflects ongoing enforcement action by
Revenue aimed at all key points in the supply chain. It is also a clear indication, however, of
the significant scale of both small-scale and bulk smuggling activity. Tackling the illicit
trade in cigarette and tobacco products remains a key objective for Revenue. Revenue has
adopted a comprehensive 3 year (2011-2013) strategy, underpinned by annual action plans,
for this important work. The strategies employed are multi-faceted and focus on border and
inland operations and internal distribution chains. They include anti-smuggling initiatives,
intelligence gathering and analysis, investigation and prosecution.
EU Context – Restructuring of Rates (Directive 2010/12/EU)
13.
EU law requires the tax on cigarettes to be made up of specific and ad valorem
components. Under previous Directives, the permissible level of the specific component was
capped at 55% of total tax, and the established Irish approach was to set it at that level. The
position changed with the enactment of Directive 2010/12/EU, which raised the ceiling for the
specific component from 55% of the total tax take on the MPPC to 76.5% of the total tax take
of the Weighted Average Retail Selling Price (WAP). Since then, a number of Member States
(Sweden, UK, Netherlands, Denmark, Greece) have availed of the new flexibility and
increased the specific component of their cigarette taxation beyond 55%. Ireland followed
this path in the 2012 Finance Act and set the specific component at 65% of total tax take on
the MPPC (66% of the total tax on the current WAP). There have been calls to extend the
specific element to a higher %, but while a higher specific element provides greater security
of revenue in the event of price decreases, or of a movement within the market towards lower
priced cigarettes, it would mean the Exchequer taking a much lower yield from any trade
increases.
For example, the Budget 2013 change increased the price of a pack of 20 cigarettes in the
most popular price category to €9.30. A subsequent trade increase in May 2013 increased this
to €9.40. This 10 cent trade increase resulted in an additional tax of 3 cent (1 cent TPT and 2
cent VAT). A rebalancing of the current tax structure to increase the specific element to the
maximum permitted level of 76.5%, while retaining the current tax levels, would have
resulted in a benefit to the tobacco companies and corresponding loss to the exchequer of 4
cent per pack of cigarettes in the most popular price category (€9.40). Given the large market
share for the higher priced categories of cigarette and the apparent stability of this share (see
below table), it would not appear opportune to re-structure the tax rates in this way.
14.
The cigarette market is characterised by less certainty than hitherto, with companies
not passing on tax increases, in full or at all, on certain (mainly smaller selling) brands.
Moreover, the tobacco companies are of the view that there is a discernible movement by
consumers towards lower priced products. As against that, they appear to be maintaining a
practice of periodic trade increases on the most popular brands. Cigarette tax payment data
2011-2013, which is based on the number of tax stamps issued, do not provide evidence of
any significant movement by consumers towards lower priced cigarettes. Data for cigarettes
4
in the lowest price category (€7.95 or less for a packet of 20 cigarettes) indicate a market
share of 6% in 2010 and 8% in 2011 and 2012 respectively. Cigarettes in the highest price
category (€8.50 or more for a packet of 20) accounted for over 80% of the market in 2011,
and up to 83% in 2012.
2010
Price
Tax
Category
stamps per
category
€7.75-€7.95 6%
Low
Medium €8.00-€8.25 12%
€8.30-€8.70 82%
High
2011
Price
Tax
Category
stamps per
category
€7.25-€7.95 8%
€8.00-€8.45 12%
€8.50-€8.90 80%
2012
Price
Tax stamps
Category
per
category
€7.25-€7.95 8%
€8.00-€8.45 9%
€8.5083%
€10.20
15.
Minimum amount of duty payable.
Directive 2011/64/EU also includes a provision for application of a minimum excise duty on
cigarettes, provided the mixed structure of the tax (that is, the combination of specific and ad
valorem elements) and the specific element parameters are respected. On 1 May 2012 a
minimum amount of duty was introduced that has to be paid irrespective of the price at which
cigarettes are sold. This brought the situation into line with the position in virtually all other
Member States. The minimum amount is €271.91 per 1,000 and represents the tax payable on
a packet priced at €7.75.
Relative Rates of Tobacco Duty on Different Tobacco Products
16.
It is normal Budget practice to decide on a defined tax increase (inclusive of VAT) on
a packet of 20 typical cigarettes (for example 10 cent on 20 cigarettes, as in the Budget of
December 2012), with pro rata increases on the other tobacco products i.e. cigars, RYO and
pipe tobacco. Budget 2013 also provided for an additional increase in the rate of TPT
applicable to RYO in order to bring it more in line with the rate for cigarettes. The excise on
RYO was increased by 50 cent (VAT included) on a 25g pack in addition to the pro-rata
increase applied following the 10 cent increase on cigarettes, giving an overall (VAT
inclusive) increase of 60 cent.
17.
While there has been something of a movement towards RYO particularly since 2008,
it still constitutes a very small proportion of total tobacco receipts (6.6% in 2012, estimated at
8% in 2013). The difference between the prices of RYO here and in Northern Ireland is €0.07,
in favour of the consumer in the North.
Health Issues
18.
Towards a Tobacco Free Society was adopted as Government Policy in 2000 and
proposed an integrated strategy for tackling tobacco consumption in Ireland. While it
continues to be the main strategy document guiding the development and implementation of
policy measures to reduce smoking prevalence, the Department of Health is currently
finalising the Report of the Tobacco Policy Review Group. This report will set out future
policy and legislative proposals to be introduced aimed at reducing smoking prevalence and
initiation rates in Ireland.
19.
The National SLÁN Survey 2007 indicated that 29% (31% men and 27% women)
reported being current smokers. The most recent survey conducted by the National Tobacco
Control Office, HSE, indicates that as at 30 June 2012 22% of the population smoke.
5
20.
The Health Behaviour in School-Aged Children Survey 2010 showed that overall 27%
of children report that they have ever smoked tobacco. This is a decrease of 9 percentage
points from the 2006 figure. 12% of children report that they are current smokers i.e. smoke
monthly or more frequently. This represents a 3 percentage point decrease from the 2006
figure of 15%. In the 2010 study there are statistically significant differences across social
class groups in current smoking status, with children from higher social class groups less
likely to report current smoking behaviour. There are no statistically significant differences
by gender.
21.
While price has an important role in the overall strategy to reduce smoking levels, it is
not the only factor. As part of Ireland’s tobacco control policy, a range of initiatives have
been introduced over the years including a ban on tobacco advertising, ban on sponsorship,
the smoking ban in 2004, a prohibition on the sale of cigarettes in packs of less than 20 since
May 2007 and, in July of 2009, a ban on the advertising and display of tobacco products in all
retail outlets etc
22.
Regulations to introduce combined text and photo warnings on tobacco products came
into force on 1 February 2013. All tobacco products placed on the market must comply with
the new regulations. Any tobacco products placed on the market prior to 1 February 2013 can
continue to be sold or offered for sale until 1st February 2014. Research and experience in
other countries has shown that health warnings combined with coloured photographs can be
an effective means of discouraging smoking and informing people about the health risks
related to smoking.
23.
Government approval was received on 28 May 2013 to begin the process of
introducing standardised/plain packaging of tobacco products in Ireland. Work is progressing
on this matter. Plain packaging, also known as generic packaging, means that all forms of
branding – trademarks, logos, colours and graphics – would be removed, except for the brand
name, which would be presented in a uniform typeface for all brands on the market. All
packs would be in a plain neutral colour, except for the mandatory health warnings. The
objective is to make all tobacco packs look less attractive to consumers and to make health
warnings more prominent. The industry claims that the introduction of plain packaging
provides increased opportunities for counterfeiters and others dealing in the illegal tobacco
trade.
24.
Despite continuing calls by health interests for further significant tax increases, and
notwithstanding Budget 2013 tax increases on tobacco products, there has been an explicit
recognition by Ministers for Finance in recent budgets that high prices here can make Ireland
an attractive place for cigarette smugglers, and that this, together with the lower than
estimated receipts against profile to end-July must be borne in mind when considering calls
for further tax increases for reasons of health protection.
Possible Excise Increases
25.
The Irish Heart Foundation (IHF) and the Irish Cancer Society (ICS), in a joint prebudget submission, have called for, inter alia, an increase in the level of specific tax levied on
tobacco products to its maximum level of 76.5%; a commitment to an annual tax-escalator of
CPI + 5% on all tobacco products; and the development of a comprehensive anti-smuggling
strategy.
26.
The estimated full year yield and the CPI effect of a range of duty increases on
cigarettes (with pro rata increases on other tobacco products) is as follows:
6
Increase
(Inc.
VAT)
Yield from
Budget
Night
Full Year
Yield
€m
CPI
Effect
%
15.4
30.7
45.8
60.9
75.8
0.029
0.058
0.087
0.116
0.145
Increase
(Inc.
VAT)
€m
10c
20c
30c
40c
50c
2.5
4.9
7.3
9.7
12.1
60c
70c
€1.00
€1.50
€2.00
Yield
from
Budget
Night
€m
14.5
16.8
23.7
34.9
45.6
Full
Year
Yield
€m
90.7
105.4
148.8
218.9
286.2
CPI
Effect
%
0.174
0.204
0.291
0.436
0.582
27.
In conclusion, it should be noted that the incentive for individuals to purchase
cigarettes duty-paid when abroad is high and could be expected to increase in the event of
future excise increases. With MPPC prices in some eastern EU Member States as low as
€2.20 for a pack of 20, the balance between the potential to achieve health benefits associated
with an increase in excise duty and any potential exacerbation of ongoing smuggling
problems is a factor to be considered.
7
B:
ALCOHOL PRODUCTS
Excise Receipts
28.
Budget 2013 provided for increases in excise duty on all alcohol products. Apart from
a general decrease in rates for all alcohol products of around 20% in Budget 2010, excise duty
on beer has remained largely unchanged since 1994 and on other products since 2001. Over
the last 10 years, excise receipts from the various alcohol beverages have changed as follows:
2003
€m
2012
€m
Beer
455.4
308.0
Cider /Perry
60.4
42.8
Spirits
305.0
263.9
Wine
167.8
231.4
Total
988.6
846.1
* Some differences due to rounding
2013
Change*
Estimated
m
(2003/2013)
€m
% Change
366.5
50.1
295.3
290.7
1,002.6
-88.9
-10.3
-9.7
122.9
14.0
-19.5%
-17.1%
-3.2%
73.2%
1.4.%
Consumption
29.
The following sets out in broad terms the position.
Beer: Consumption declined for all years from 2001 to 2012, with the exception of 2005,
when a modest increase of 0.3% occurred. Clearances for 2013 are expected to fall by 2%.
Cider: In 2002, following an 87% Budget rate increase, clearances fell by just over 11%.
This was followed by modest growth between 2003 and 2006. However, clearances fell
between 2007 and 2012, and are expected to fall again by 2% in 2013.
Spirits: Consumption fell by over 20% in 2003 following a 42% Budget rate increase. This
was followed by growth between 2004 and 2007. Clearances fell by 7.4% in 2008 and 18.5%
in 2009. However, they increased by 11.7% in 2010, 3.2% in 2011 and 2.4% in 2012, but are
expected to fall by 3% this year.
Clearances of spirit-based alcopops are expected to increase by 3% in 2013.
Wine: Wine is the only product for which there was sustained growth in consumption 2001 –
2007. Consumption declined in 2008 and 2009, but grew in 2010 and 2011. Wine is the only
alcohol product showing overall growth in consumption between 2001 and 2011. However,
clearances fell by 1.9% in 2012 and are expected to fall by 9% in 2013.
Given the fact that excise duty is largely unchanged since 1994 it is unlikely that tax is the
driving factor in consumption changes.
8
30.
Data on consumption is set out in the following table:
BEER
CIDER
SPIRITS
WINE
Yearly Growth
Rate
Yearly Growth
Rate
Yearly Growth
Rate
Yearly Growth
Rate
2001
2002
2003
2004
2005
2006
2007
2008
2009
0.4%
-0.5%
-2.5%
-0.9%
0.3%
- 0.3%
- 0.6%
- 5.2%
-6.5%
10.9%
-11.3%
1.1%
2.0%
4.5%
3.7%
- 0.9%
- 11.0%
-5.9%
3.5%
5.2%
-20.1%
2.8%
2.4%
5.0%
7.2%
- 7.4%
-18.5%
12.4%
12.8%
8.1%
14.3%
4.0%
7.2%
7.2%
- 3.2%
-6.9%
2010
2011
-0.9%
-1.9%
-2.5%
-0.05%
11.7%
3.2%
16.9%
2.1%
2012
-0.9%
-3.4%
2.4%
-1.9%
2013(est)
-2.0%
-2.0%
-3.0%
-9.0%
Year
Relative Taxation of Products
31.
The table below shows the comparative alcohol products tax content of the various
types of alcohol beverages in Ireland as measured by the amount charged per degree of
alcohol in the product (taking typical products within each category).
Per litre per 1% alcohol
Still Wine
Beer
Spirits
Cider
Spirit
Alcopop
Wine
Alcopop
Sparkling
Wine
Sherry/
Port
@ 12.5%
@ 4.2%
@ 40%
@ 4.5%
@ 5%
@ 4%
@ 12%
@ 18%
€0.2965
€0.1913
€0.3685
€0.1781
€0.3685
€0.3088
€0.6177
€0.2988
Viewed in these terms, the tax burden on spirits and spirit alcopops is twice that on beer, and
the most heavily taxed product is sparkling wine.
By reference to Alcohol Product
Still Wine
75 cl
Bottle
€2.78
Beer
Spirits
Cider
Pint
Spirit
Alcopop
27.5 cl
Bottle
Wine
Alcopop
27.5 cl
Bottle
Sparkling
Wine
75 cl
Bottle
Sherry/
Port
75 cl
Bottle
Pint
70 cl
Bottle
€0.46
€10.32
€0.46
€0.51
€0.34
€5.56
€4.03
Retail Price Movements – Evolution of “Real Values”
32. Because of successive price increases by the trade, except in the case of lager sold at offlicensed premises, the specific rather than ad valorem nature of the duties and the reduction of
APT rates in Budget 2010, the value of excise duty rates on all products in the on-trade (when
measured as a percentage of retail prices) has fallen over the period since 2003. With the
9
exception of whiskey and cider, the proportion of retail price represented by Alcohol Products
Taxes has increased in the off-trade.
Excise
(a) Bar
Pint Stout
Pint Lager
Pint Cider
Whiskey
(standard
measure)
(b) Off-Licence
Btl Lager (33cl)
@ 4.3% ABV
Btl Table Wine
Can Cider (50cl)
Btl Whiskey
Price
Excise % of
Price
Excise
2003
Price
Excise % of
Price
2013
€0.47
€3.42
13.7%
€0.46
€4.16
11.1%
€0.47
€3.79
12.4%
€0.46
€4.54
10.1%
€0.47
€3.80
12.4%
€0.46
€4.59
9.9%
€0.56
€3.26
17.1%
€0.52
€3.88
13.4%
€0.28
€1.72
16.3%
€0.27
€1.55
17.4%
€2.05
€9.10
22.5%
€2.78
€10.31
26.9%
€0.42
€2.07
20.3%
€0.40
€2.20
18.2%
€10.99
€23.87
46.0%
€10.32
€23.02
44.8%
Some National Issues
33.
“On” v “Off” Sales: 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. Industry data indicate that the divide for Beer is now at 62% On Trade and 38% Off
Trade. The general perception, however, is that off-sales are probably now at least on a par
with on-sales. The drinks industry has, for some time, argued for the introduction of a
graduated fee structure for off-licences similar to that for pubs, given the trend towards offsales in recent years. While the average excise paid by the on-trade (€772 - figures for
licences renewed up to 30/09/2012) is much lower than the combined fees paid by the offtrade (€1,500), only a relatively small proportion of pubs (approx 13.1% - figures for licences
renewed up 31/09/2012) pay fees above that level. The previous Minister in the 2011 Budget
announced that a review of the alcohol licensing regime would take place during 2011. While
there has been no follow-through to date, the option to carry out such a review remains, and
the issue has been looked at in terms of practical issues which might arise were a universal
scheme to be put in place. Further discussions would have to involve the Department of
Justice, which has responsibility for the relevant licensing legislation.
34.
Purchases in UK: Relative prices in the UK, especially in Northern Ireland, are the
major factor influencing out of State sourcing. In the case of beer and wine, a greater diversity
of brands, and widespread short-term discounting by retailers, makes it difficult to compare
prices. There is also a considerable variation in the relative prices within each type of product,
and the presence in Northern Ireland of smaller measures and lower strengths of beers and
ciders may, because of the apparent price advantage, distort matters further. Nevertheless, the
most recent cross-border survey shows a differential in favour of purchases in the North.
35.
Smuggling/Counterfeit Products: There have been 3 successful prosecutions for
alcohol offences up to 31 July this year, compared to 4 in 2007, 2 in 2008, 19 in 2009, 30 in
10
2010, 9 in 2011 and 11 in 2012. Alcohol fraud continues to be the subject of enforcement and
prosecution. There has been 1 alcohol offence prosecution so far this year concerning the
delivery of counterfeit alcohol. This is in contrast to the 7 prosecutions in 2009, 6 in 2010, 2
in 2011 and 6 in 2012. APT law in this area was strengthened in the 2005 Finance Act to help
combat this type of fraud. The estimated retail value of alcohol seizures last year was €0.7m
and the amount for the months January to 31 July 2013 was around €1.108m. The increase is
due to 1 large seizure of spirits in April of this year.
36.
National Alcohol Misuse Policy:
The Cabinet Committee on Social Policy is currently considering options in the context of a
range of issues arising from the recommendations of National Substance Misuse Steering
Group, with particular reference to Minimum Unit Pricing and other measures which might
assist in finding a solution to the problem of the availability of cheap alcohol. Calls have also
been made to re-introduce the ban on below cost selling, specifically of alcohol, and
particularly in supermarkets, which is a matter for the Department of Enterprise, Jobs and
Innovation and the Department of Justice. In this regard, the proposal of the “lid-on” levy put
forward by DIGI and supported by others has been found not to be in keeping with the
provisions of the relevant EU Directive on alcohol excise.
37.
In its pre-Budget submission, the Drinks Industry Group of Ireland (DIGI) has
proposed that there should be a reversal of the Budget 2013 increases in the excise duty on
alcohol, as well as retention of the 9% VAT rate, while NOffLA (representing off-licences)
also seeks to reverse the increases, as well as re-introducing the ban on below cost selling.
Possible Excise Increases
38.
By European standards Ireland applies high levels of excise on alcohol products (see
Annex 4). Ireland has the highest excise rates in the EU on still and sparkling wines, third
highest for spirits and fourth highest for beer.
39.
The following table shows the estimated effect of a range of VAT inclusive
increases in terms of yield and impact on the CPI.
Full
Year
5c
Beer (per €34.4m
pint)
0.05%
Spirits
€18.8m
(half glass) 0.03%
Cider (per €4.7m
pint)
0.01%
25c
Wine
€14.0m
(Bottle)
0.03%
From
Budget
Night
€7.6m
€6.2m
€0.6m
€3.2m
Full
Year
10c
€68.5m
0.09%
€36.9m
0.05%
€9.4m
0.02%
50c
€27.1m
0.06%
From
Budget
Night
Full
Year
15c
€15.2m €102.1m
0.13%
€12.3m €54.3m
0.07%
€1.1m €14.0m
0.03%
75c
€6.3m €39.3m
0.09%
11
From
Budget
Night
Full
Year
20c
€22.6m €135.2m
0.18%
€18.2m €70.9m
0.10%
€1.6m €18.5m
0.04%
100c
€9.1m €50.5m
0.12%
From
Budget
Night
€30m
€23.9m
€2.2m
€11.8m
ANNEX 1
Cross Border Survey – 3 July 2013
Comparison of prices of Excisable Products
(Noting Tax/Duty differences between Ireland & UK)
Item
Price In
€
Excise & VAT
€
Difference in Actual Price
Between N.I. and State
€
State
2.08
N.I.
1.89
State
0.79
N.I.
0.79
0.19 Dearer in State
2.02
1.62
0.79
0.81
0.40 Dearer in State
26.07
23.72
15.19
13.23
2.35 Dearer in State
Vodka (bottle)
20.35
17.30
13.48
11.58
3.05 Dearer in State
Wine
(Chard)
Sparkling Wine
10.00
8.84
4.65
3.82
1.16 Dearer in State
15.00
12.44
8.36
5.08
2.56 Dearer in State
Cigarettes (20)
9.40
9.46
7.34
7.28
0.06 Cheaper in State
Stout
(per 500ml can)
Lager
(per can)
Whiskey (bottle)
All prices are in euro, using an exchange rate of 1 euro = 0.8516 Sterling
12
ANNEX 2
EU Comparisons on Cigarettes in respect of
MPPC and Excise Content
Member State
Ireland
Sweden
Denmark
Belgium
Germany
Finland
Cyprus
Malta
Luxembourg
Italy
Portugal
Greece
Slovenia
Romania
Czech Republic
Croatia
Estonia
Bulgaria
Hungary
Austria
Spain
France
Lithuania
Latvia
Netherlands
Poland
UK
Slovakia
Average
MPPC
MPPC 20
€470.00
€9.40
€329.21
€6.58
€288.38
€5.77
€263.15
€5.26
€263.15
€5.26
€225.00
€4.50
€225.00
€4.50
€220.00
€4.40
€220.00
€4.40
€215.00
€4.30
€190.00
€3.80
€175.00
€3.50
€155.00
€3.10
€152.58
€3.05
€135.57
€2.71
€134.67
€2.69
€131.00
€2.62
€109.93
€2.20
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
€216.81
€4.34
Excise
Excise content
content per
per 1000 **
pack of 20
€279.19
€5.58
€169.70
€3.39
€159.34
€3.19
€154.64
€3.09
€151.77
€3.04
€146.00
€2.92
€131.50
€2.63
€132.00
€2.64
€123.40
€2.47
€144.65
€2.89
€122.09
€2.44
€115.00
€2.30
€98.84
€1.98
€85.70
€1.71
€86.92
€1.74
€76.36
€1.53
€88.23
€1.76
€76.92
€1.54
€130.13
€2.60
Source: EU Excise Tables July 2013, Ref 1038
** Excise content is included at the minimum rate per 1,000/20, if that is greater. These are indicated
in bold in the table
13
ANNEX 3
E.U. Cigarette Taxation based on WAP
Member
State
Ireland
UK *
Netherlands
Sweden
Denmark
Germany
Greece
Portugal
Malta
Slovenia
Slovakia
Romania
Cyprus
Bulgaria
Czech
Republic
Poland
France
Estonia
Hungary
Lithuania
Latvia
Austria
Croatia
Spain
Finland
Belgium
Luxembourg
Italy
Specific
excise as
Specific a %of
Excise
Total tax
(per
(including
20)
VAT)
€
€4.75
66.01%
€4.03
62.01%
76.50%
€3.40
76.27%
€3.33
€3.13
73.64%
€1.89
50.35%
€1.60
55.75%
€1.59
51.60%
48.05%
€1.54
€1.22
49.18%
€1.19
51.09%
€1.13
52.84%
36.35%
€1.10
€1.03
52.49%
€0.93
€0.92
€0.92
€0.90
€0.88
€0.86
€0.72
€0.70
€0.53
€0.48
€0.45
€0.44
€0.35
€0.21
43.03%
40.77%
18.50%
40.89%
36.38%
45.95%
35.27%
22.79%
26.89%
14.94%
12.29%
11.97%
11.73%
6.00%
Ad
valorem Ad
as a % of Valorem
WAP
Excise
€
8.83%
€0.79
16.50%
€1.23
2.36%
€0.12
1.00%
€0.06
1.00%
€0.05
21.80%
€1.07
20.00%
€0.66
20.00%
€0.77
25.00%
€1.03
24.55%
€0.72
23.00%
€0.66
19.00%
€0.50
34.00%
€1.33
23.00%
€0.54
27.00%
31.41%
49.70%
33.00%
31.00%
25.00%
34.00%
42.00%
37.00%
51.00%
52.00%
50.41%
48.11%
53.69%
€0.75
€0.83
€3.03
€0.86
€0.91
€0.60
€0.87
€1.70
€0.94
€2.06
€2.34
€2.41
€1.90
€2.45
Total tax
(including Minimum
VAT) as a excise (per
% of WAP 1,000)**
€
80.73%
€271.91
87.30%
N/A
83.91%
€176.11
77.06%
N/A
79.67%
N/A
76.61%
N/A
87.45%
€115.00
79.76%
€122.09
77.49%
€127.50
83.80%
€97.00
81.11%
€91.00
81.33%
€79.00
77.38%
€121.50
83.48%
€75.67
77.87%
84.61%
81.09%
84.02%
82.14%
78.37%
79.33%
75.99%
77.97%
80.28%
81.35%
76.98%
69.27%
75.58%
€86.92
€87.48
€195.00
€84.80
€87.40
€70.67
€74.69
€117.48
€76.36
€128.65
€146.00
€137.71
€105.00
€144.65
Source: EU Excise Tables July 2013, Ref 1038
*UK WAP is £325.50 which converts to £0.87350 per exchange rate of 31 July 2013
**Figures in bold show MS with a higher minimum duty rate than that calculated on the
WAP. Minimum excise as a % of WAP for the UK relates to Sterling figures
14
Minimum
Excise as
a% of
WAP
60.21%
70.64%
66.55%
57.06%
59.67%
60.65%
68.75%
63.45%
62.23%
65.76%
64.44%
61.98%
62.13%
66.82%
60.51%
65.91%
64.70%
67.35%
60.88%
61.01%
61.98%
59.32%
57.97%
62.92%
62.00%
59.62%
57.00%
58.23%
ANNEX 4
Alcohol Excise Taxation in EU Member States (from high to low)
EU Excise Duty Tables @ 1st July 2013.
Beer
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Wine (Still)
Wine (Sparkling)
Spirits
€ per hectolitre per degree
€ per hectolitre
of
of product € per hectolitre of product
degree of alcohol
€ per hectolitre of pure alcohol
Finland
UK
€29.90
€21.88
Ireland
Finland
€370.64
€312.00
Ireland
UK
€741.28
€391.10
Sweden
Finland
€5,917.67
€4,340.00
Sweden
Ireland
Slovenia
Denmark
€19.59
€19.13
€11.00
€7.51
UK
Sweden
Denmark
Netherlands
€305.35
€254.69
€147.68
€83.56
Finland
Sweden
Netherlands
Denmark
€312.00
€254.69
€240.58
€190.20
Ireland
UK
Greece
Denmark
€3,685.00
€3,230.68
€2,450.00
€2,011.96
€180.50
€136.00
€93.30
Belgium
France
Netherlands
€1,962.00
€1,689.05
€1,594.00
France
Greece
Netherlands
€7.20
€6.50
€6.12
Estonia
Latvia
Lithuania
€80.64
€64.64
€57.34
Belgium
Germany
Czech Rep.
Cyprus
Estonia
Italy
Hungary
€6.00
€6.00
€5.88
€5.67
Belgium
Poland
France
Hungary
€52.75
€38.48
€3.66
€0.00
Estonia
Slovakia
Latvia
Hungary
€80.64
€79.65
€64.64
€57.64
Estonia
Malta
Latvia
Germany
€1,565.00
€1,400.00
€1,350.19
€1,303.00
Croatia
Austria
Poland
€5.39
€5.00
€4.75
Austria
Germany
Greece
€0.00
€0.00
€0.00
Lithuania
Poland
Romania
€57.34
€38.48
€34.05
Lithuania
Poland
Slovenia
€1,278.96
€1,208.08
€1,200.00
Belgium
Malta
Slovakia
Portugal
€4.28
€3.75
€3.59
€3.39
Spain
Italy
Luxembourg
Portugal
€0.00
€0.00
€0.00
€0.00
France
Austria
Greece
Spain
€9.07
€0.00
€0.00
€0.00
Portugal
Hungary
Czech Rep.
Slovakia
€1,192.11
€1,167.48
€1,136.36
€1,080.00
Czech Rep.
Latvia
Lithuania
Spain
Romania
Germany
Luxembourg
€3.19
€3.13
€2.46
€2.26
€2.06
€1.98
€1.98
Cyprus
Slovenia
Slovakia
Bulgaria
Czech Rep.
Romania
Malta
€0.00
€0.00
€0.00
€0.00
€0.00
€0.00
€0.00
Italy
Luxembourg
Portugal
Cyprus
Bulgaria
Slovenia
Malta
€0.00
€0.00
€0.00
€0.00
€0.00
€0.00
€0.00
Luxembourg
Austria
Cyprus
Spain
Italy
Romania
Croatia
€1,041.15
€1,000.00
€956.82
€830.25
€800.01
€750.00
€713.76
Bulgaria
€1.92
Croatia
€0.00
Croatia
€0.00
Bulgaria
€562.43
EU Average
€7.20
EU Average
€63.27
EU Average
€105.76
EU Average
€1,693.43
EU Minima
€1.87
EU Minima
€0.00
EU Minima
€0.00
EU Minima
€550.00
United Kingdom rates are Sterling £19.51, £253.39, £324.56 and £2681.00 and the Euro
equivalents shown above are @ exchange rate of £0.87350. This is the rate of the 31st July
2013.
15