Is it time to cut tax on alcohol? A doctor and drinks industry representative argue for and against
reduce alcohol-related illness and recover some of the costs of alcohol harms.
Alcohol is the major reversible cause of health harms, deaths and other harms in Ireland.
Alcohol
causes more than 1,500 deaths in
Ireland
each year, more than 200 illnesses and is responsible for enormous social problems and
crime
. Children everywhere in this country suffer the consequences of Foetal Alcohol Spectrum Disorder and adverse childhood experiences because of parental problem alcohol use and underage drinking. These issues are tragic and pervasive throughout our society. Many of you reading this now, like me, will know friends and loved ones damaged or killed by alcohol.
The most effective single measure to reduce these alcohol harms is increasing excise tax, yet these have not changed in 11 years. Excise taxes reduce the affordability of alcohol, reduce its consumption and harms, and have the advantage of increasing the tax revenues to the exchequer.
Alcohol carries an enormous financial burden to the State in terms of healthcare, social care, criminal justice costs and loss of workplace productivity. The World Health Organisation conservatively estimates these costs in the region of 2.5 per cent of GDP – about €12 billion annually for Ireland.
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Increasing the tax take from the alcohol manufacturing industry is a great strategy for society and taxpayers. This is especially so given the horrible truth that we as citizens pick up the downstream costs of alcohol harms, which is more than the €1.2bn annually that the alcohol industry pays in excise taxes. The fact remains that the profits of the alcohol manufacturing industry are privatised to mainly faceless alcohol multinationals. The costs, meanwhile, are absorbed by the State. Put simply, that means you and I cover the costs of alcohol harms as citizens and taxpayers.
There is enormous international evidence that public health measures are effective in reducing alcohol harms. Alcohol consumption has fallen in Ireland by 15 per cent since the Public Health Alcohol Act (2018), landmark legislation which classified alcohol consumption as a health issue rather than an economic issue.
The alcohol industry should have no role in formulating public health policy in Ireland
There is no doubt that this pioneering legislation has been an outstanding start in our battle to reduce alcohol harms, but it is only a start. Why? Irish teenagers and adults are still among the worst binge drinkers in the 38 member nations of the OECD (Organisation for Economic Co-operation and Development). Irish users of alcohol consume approximately 35 per cent more than HSE lower-risk limits.
Why do we have a scenario where Ireland and its taxpayers are funding the costs of the alcohol industry's downstream damage? No doubt it is because of the pernicious access and influence which the global alcohol industry has on governments internationally. A recent study published in the British Medical Journal demonstrated high levels of alcohol industry penetration and few safeguards against industry influence in all 24 jurisdictions analysed.
Ireland fared badly and was the only European state to record industry penetration across all five indices analysed. The alcohol industry should have no role in formulating public health policy in Ireland, given its profit motive and ensuing conflict of interest.
Attempted alcohol industry influence has recently been seen in action in Ireland, with pressure being put on Government to delay the
introduction of alcohol health information labelling
, a simple measure to inform citizens of the massive and proven harms of alcohol.
So, let's reverse the proposition. We should increase excise tax on alcohol by 15 per cent and then link annual excise tax increases automatically to the consumer price index. This has two benefits: to reduce alcohol consumption and harms, and to increase the taxes paid by the alcohol industry to contribute to paying for some of the costs of their harmful products to society. Now there is a win-win for the citizens and voters of Ireland.
Prof Frank Murray is chair of Alcohol Action Ireland and a consultant hepatologist
Donall O'Keeffe: Yes. Reducing alcohol excise is essential for fairness and industry viability.
There is a powerful case for reducing alcohol excise in Budget 2026.
Ireland is an extraordinarily high-tax economy for any consumer who likes to have a drink and for any business operating in the drinks industry. Our punitive excise hits the millions of Irish adults who drink alcohol and damages the viability of the thousands of Irish enterprises such as brewers, distillers, wholesalers, pubs, restaurants, hotels and off-licences which produce, distribute and retail alcohol. It's a startling fact that excise and VAT combine to account for almost 30 per cent of the retail price of any drink in pubs, hotels and restaurants across the country.
Why do we impose such high alcohol taxes on our citizens? The concern in the past would have been that Irish alcohol consumption was high by international standards and should be controlled. That argument is no longer valid. Our per adult consumption is on a long-term downward trend, falling by one-third since 2001,
with a further 4.5 per cent decline last year
. Given lifestyle and consumer changes, this downward trend is set to continue. The Health Research Board (2024 report) noted Ireland was ranked 16th out of 38 OECD countries on per capita consumption of alcohol. Ireland is not now a high-alcohol-consumption country by EU or OECD standards.
Looking at the business environment for hospitality and drinks businesses, we continue to shoot ourselves in the foot by imposing very high alcohol excise levels. Readers will probably have come across bottles of Irish whiskey for sale in Portugal and Spain at lower prices than in Ireland. That is mainly because of the high Irish excise level.
Excise for a bottle of whiskey sold in an Irish off-licence is almost €12 compared to €2.69 in Spain. This is a serious indirect tax burden on consumers. The Exchequer took €1.2 billion in alcohol excise in 2024 and a further €1.5 billion in VAT. It is clear evidence of the Government's high-tax alcohol economy in action.
Our excise comparison with the EU is dramatic. Ireland has the second highest wine excise, the third highest beer excise and the third highest spirit excise in the EU and UK combined. Furthermore, the differences with most EU countries are substantial. Fifteen EU economies do not impose any excise at all on wine. Ireland's beer excise is 11 times that of Germany. Irish spirits excise is 4.4 times that of Spain.
Between 2005 and 2023, over 2,000 pubs went out of business
Budget 2026 is about the future and in that context, huge economic uncertainty adds further weight to our call for an excise reduction.
The Irish economy is now expected to perform worse in 2025 and 2026 than was expected only a few months ago arising from uncertainty created by US economic policy. The outlook for our critical tourism sector for next year is highly uncertain.
The industry has faced substantial cost increases arising from the recent high inflation period and also from Government policy measures. Commercial viability throughout the hospitality sector has been severely damaged. The need for support has been recognised in the Programme for Government. That support should take the form of an excise cut.
Reducing the very substantial burden of excise will improve the viability of pubs and the wider hospitality sector. Between 2005 and 2023, over 2,000 pubs went out of business, representing a loss of one-quarter of all the public houses in the country. Every single county in Ireland had a drop in pub numbers, with seven counties losing over 30 per cent of their pubs. In addition, in the first quarter of this year, an estimated 150 licensed and unlicensed restaurants have closed.
Government action is now urgently required to support the drinks industry and hospitality sector – essentially small, family businesses which operate in every village, town and city across the country. Alcohol excise should be cut by 10 per cent in Budget 2026.
Donall O'Keeffe is secretary of the Drinks Industry Group of Ireland and CEO of the Licensed Vintners Association
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