The Drinks Industry Group of Ireland (DIGI) has called for a 15% reduction in the country's "high" excise tax rate over the next two years to reduce costs for thousands of rural Irish businesses across the country.
In its 2025 pre-budget submission, DIGI is urging a 7.5% reduction in the excise tax rate on drinks, followed by a further 7.5% reduction in 2026.
It said this would gradually bring Ireland's tax rate in line with the lower average EU norms.
DIGI noted that as well as charging VAT on drinks, Ireland levies the second highest overall tax rate in the UK and EU on the drinks industry, second only to Finland.
"This is a self-imposed competitive disadvantage to Ireland's drinks and hospitality sector. The Government takes a total of 30-35% of the retail price of every drink sold in excise and VAT," the group added.
A recent survey conducted by DIGI among almost 600 members - including rural pubs and restaurants across the country - found that almost one in four had seen their business costs increase by 20%-30% in the last two years.
15% said their business costs had increased by over 40% in the last two years.
Research also shows that an average of 114 pubs have closed annually since 2005, with this trend rising to 144 in the later years of 2019 to 2023.
DIGI said today that an excise tax rate reduction would have an immediate tangible impact by cutting tax burden instantly and supporting the long-term sustainability of the drinks and hospitality industry here.
Pointing out the magnitude of the variation in excise tax rates between Ireland and other EU economies is large, DIGI said that Irish consumers pay 55 cent excise tax on a pint of beer, compared to the Germans who pay just five cent.
On a bottle of Irish produced whiskey, Irish consumers pay almost €12 compared to their Spanish counterparts who pay only €2.69 in excise tax, while a glass of wine in Ireland incurs an excise tax of 80 cent compared to a cent in France. 15 EU countries pay no excise on wine, DIGI added.
Kathryn D'Arcy, DIGI Chair and Irish Distillers' Communications and Corporate Affairs Director, said that when DIGI's economic analysis is combined with recent data showing that more than a quarter of rural pubs have closed since 2005, it underscores the urgent need for meaningful and strategic policy measures to safeguard the future sustainability and growth of the sector.
"We are calling for a reduction in Ireland's excessively high excise tax rate as a crucial step towards aligning with UK and EU average rates," Ms D'Arcy said.
"The impact would be felt immediately, lowering the tax burden for thousands of businesses across the country overnight, particularly in rural areas where the high cost of doing business is felt most acutely," she said.
"This is a policy that the Government can easily implement and would send a strong signal of support to the sector, offering greater certainty around business costs in an increasingly uncertain time," she added.
