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Dáil Éireann debate -
Wednesday, 7 Feb 1979

Vol. 311 No. 4

Financial Resolution No. 4: Excise—Spirits.

I move:

(3) That in this Resolution—

"the Order of 1975" means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975);

"the Act of 1976" means the Finance Act 1976 (No. 16 of 1976).

(2) That the duty of excise on spirits imposed by paragraph 4 (2) of the Order of 1975 shall be charged, levied and paid, as on and from the 8th day of February, 1979, at the several rates specified in the Schedule to this Resolution in lieu of the several rates specified in the Second Schedule to the Act of 1976.

(3) That nothing in this Resolution shall operate to relieve from or to prejudice or affect the additional duty of excise in respect of immature spirits imposed by paragraph 4 (2) of the Order of 1975 at the several rates specified in the third column of the First Schedule to the said Order.

(4) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).



Description of Spirits

Rate of Duty


For every gallon computed at proof of spirits of any description not mentioned hereinafter and imported mixtures and preparations containing spirits


For every gallon of imported perfumed spirits entered in such manner as to indicate that the strength is not to be tested


For every gallon of imported liqueurs, cordials, mixtures and other preparations in bottle entered in such manner as to indicate that the strength is not to be tested


Could the Minister tell me what is the existing rate of duty on a glass of whiskey and what will the new rate be on a glass of spirits? What is the existing rate of duty on imported brandy and what will the new rate of duty be?

The existing rate of duty on a glass of spirits is as follows: the duty element is 28.51p per glass, the VAT content is 7.09p making a total of 35.6p. The trade margin is 42.4p bringing it up to a total retail price of 78p. The effect of the budget increase will be to leave the trade margin unchanged at 42.4p. The duty element will go up to 33.96p, the VAT element will go up to 7.64p, making a total tax content of 41.6p, an increase of 6p on the overall retail price from 78p to 84p.

What is the appropriate figure for brandy? I understand that brandies can be more than whiskies.

The basic increase applies to all spirits.

The position is that the Minister is increasing the excise duty on a glass of spirits, whiskey or gin, from 35.6p to 41.6p. That is an increase of 6p. What is the figure relating to brandies? Take Hennessy, for example, what is the excise duty on a glass of Hennessy?

So far as I know, the duty is the same. The price is different because the price of brandy, exclusive of taxation, differs from the price of whiskey or other spirits.

There was a difference formerly in the make up of duty on Irish produced brandy. We can ascertain if there is any change or discrepancy during the course of the Finance Bill because I appreciate that the Minister is only standing in for the Tánaiste.

We are dependent on our smokers and drinkers for tax revenue. We were not satisfied this morning that a person drinking a glass of spirits and contributing 35.6p to the Exchequer was making a reasonable contribution. When this vote is taken, we will be putting an additional load of 6p on him by bringing the price up to 41.6p. This is a savage increase bearing in mind that, for many people, drinking spirits is not a luxury. Many people, pensioners and so on, rely to a great extent on a drop of punch, whiskey or brandy. The publican is now a tax gatherer but he does not get much pay for the job. Publicans are now collecting this money but it is not their own money they are contributing, it is the drinking public. We are leaning too heavily on them. It is all very well to say you do not have to pay this tax if you do not drink. Supposing that that admonition were taken seriously and we all decided not to drink any more spirits or beer, where would the country be, where would tax revenue be, where would the many people employed in the drink industry be? It is unfair to take advantage of this budgetary proposal to add again to the burden of those who take a drink, particularly the elderly and those on low incomes.

People living in rural areas often go along to the local pub, particularly on winter evenings, to have a chat with their neighbours. Going to the pub and having a few drinks is their main form of social life. The Minister is now, by this callous increase, depriving these people of that luxury. Many workmen after a long day's work will feel like having a drink. There is nothing wrong with this. It is an Irish tradition. The Minister is now proposing in Resolution No. 4 to increase the price of spirits and in Resolution No. 5 to increase beer tax.

I am not depriving them of a luxury.

I have a query in connection with the market which we have secured on the Continent, in the United States and Canada for Irish whiskey. I make particular reference to "Irish Mist" and to the variety of attractive whiskies which are manufactured by distillers in my own constituency who give very good employment. I am anxious to know whether this increase, as a result of the budget, will in any way affect the export price of whiskey particularly because of the competition between Irish whiskey and Scotch whiskey. I cannot speak from experience but many of my acquaintances are reasonably good judges of whiskey. Irish whiskey, particularly that which is exported, is very highly spoken of. Those engaged in the production of this product have been the recipients of congratulations because of the very fine product which is exported to the United States, Canada, the EEC and to other countries.

The Deputy is getting away from the resolution before the House.

I appreciate that, Does the Minister see any danger that the increase which has been so unreasonably imposed in this budget will affect our export market? Has his colleague, the Minister for Finance, gone into this very fully and ensured that there will not be a falling off in orders from the Continent and in other orders for Irish whiskey which are the result of a big effort by Córas Tráchtála and those promoting the sale of Irish whiskey abroad. I am sure the Ceann Comhairle sees the point I am anxious to make.

I appreciate that with your great kindliness and understanding you see it, but I want the Minister for Economic Planning and Development to see it and convey——

That will be more difficult.

——my grave concern to the Minister for Finance about the effects of this resolution on Irish Mist and other high quality spirits manufactured and produced in my constituency. I hope this increase will not in any way affect the orders which have been coming in. For that reason I would very much appreciate a guarantee from the Minister that the increase will not affect the export market and the valuable and useful work which has been put into the promotion of the sale of Irish whiskey abroad.

This Financial Resolution must be opposed as we opposed Resolution No. 3 and will oppose Resolution No. 5. The Minister for Finance said:

The Minister for Industry, Commerce and Energy will make an announcement shortly about price increases on some of these commodities which have been recommended by the National Prices Commission.

An increase of 6p in the price of a glass of spirits is sizeable, with a further increase in the pipeline to be announced shortly. This will have serious repercussions at many different levels. The licensed vintners will be very much affected by this resolution and they will be very much opposed to it and to the increase in the price of beer and tobacco. Trade will be hit. On a previous occasion when there were sizeable increases, trade was hit and it took a long time for it to recover.

Those resolutions will have serious repercussions and implications for the tourist industry. The consumer price index is being increased by 1.1 per cent and that will mean an increase in the cost of holidays. Many people partake in social drinking during the holiday period. Everybody in the tourist industry will be worried about that. To bring in a total of £37.7 million from these items is far too much. The Minister said it was a 10 per cent increase over a two-year period, but the full effect is now being felt.

The Deputy has made the point. It is not usual to make speeches at this stage. An opportunity to do so will arise more than once before the debate is concluded.

I appreciate that. I feel that an increase of 6p is a sizeable one. It will affect employment opportunities in the licenced vintners' trade and will have serious repercussions right down the line.

Perhaps the Minister would give us the gross effect on the CPI of all the increases—on tobacco, on spirits and on beer?

The Deputy is anticipating other resolutions.

It will save me repeating the question again.

The 1.1 per cent is the combined effect of all the proposed tax changes. The 1.1 per cent on the CPI relates to tobacco, beer and spirits. It is not confined to spirits alone, which I understood Deputy Mitchell to suggest.

What effect will the margins of publicans, distillers and brewers have on the CPI?

There are no changes in the margins. These are specific proposals to increase the total taxation on these items and, therefore, to increase the retail prices by the amount of the tax increases only. There are no changes in trade margins.

Is the Minister assuring the House that there will not be an application for an increase in price next month or the month after?

No. What the Minister for Finance specifically said in his speech was that the Minister for Industry, Commerce and Energy would deal with the question of any applications for price rises originating from the trade. He said the Minister would make an announcement shortly in relation to applications before the National Prices Commission.

Would the Minister agree that the glass of spirits in the pub will cost 8p or 9p more in a few months and that the pint will be increased by 4p?

I am not trying to anticipate future events. The issue before the House is whether additional taxation should be levied on these items in order to assist in financing Exchequer requirements. Of course there are the possibilities of future price rises, not alone on spirits and tobacco but on many other items, because of cost increases throughout the economy.

That is the point I am trying to raise. What is the gross effect of this move on the CPI? The direct effect on the CPI is 1.1 per cent and that does not take account of demands, which inevitably follow budget increases, from brewers, distillers and publicans.

There is no question of allowing additional trade increases because of additional budgetary adjustments. The only way in which additional price increases would be granted to the trade would be for legitimate trade costs such as increases in wages, raw materials, or any other legitimate expense which they might incur. What we have before us is a proposal to increase the retail prices of these items specifically for increased taxation only. There are no consequential effects on trade.

In so far as I am aware, let me assure Deputy Flanagan that it should not have any adverse effect on export marketing of Irish spirits because there are no duties of any kind levied on export items. I cannot resist the slightly humorous aside that, as we get glowing tributes to the quality and merits of Irish spirits, we should encourage greater consumption of them abroad. Let me assure the Deputy that there is no adverse effect on the export marketing of these goods.

I should like to refer to Deputy Murphy's concern with what he described as these "savage increases". At the present time, that is, before the increase is imposed, the total tax content on the retail price of a glass of spirits is under 46 per cent of the total. If he is really concerned with savage increases in taxation affecting the price of them, he should look at the behaviour of the Coalition Government which he supported. They were the ones who increased the total taxation content on spirits to a high point of something over 54 per cent. Indeed, even at the end of 1976, the last point at which they were involved in it, the taxation was still of the order of 49 per cent. Even when this increase is imposed tonight it will still have the effect of only increasing the total taxation content to something of the order of 49 per cent. So, at no stage will we be imposing taxation——

Forty nine per cent of a much higher figure.

But incomes have increased over the same period and so have prices in general. I return to a point which I made earlier in relation to the tobacco taxation, namely, that there was no taxation increase last year, that the increase proposed here is again of the order this time of less than 10 per cent. Six pence on 78p is just under 8 per cent and an 8 per cent increase in price over a two year period must be considered relatively moderate in the context of price and cost movements generally in the economy. Therefore, I must totally reject the notion that this could be regarded as a "savage increase". If there were to be any criticism of it I should have thought it would be for its being too light rather than too heavy.

Has the Minister divided the percentage increase in relation to children's allowances in the same way?

There is an overall increase in children's allowances of 28 per cent, much better than you ever did.

Over how many years?


When the Minister says that the increase in excise duty on spirits will have no adverse effect on exports is he really telling the House that it is not applicable to exports?

Question put.
The Dáil divided: Tá, 74; Nil, 50.


  • Ahern, Bertie.
  • Ahern, Kit.
  • Allen, Lorcan.
  • Andrews, David.
  • Andrews, Niall.
  • Alyward, Liam.
  • Barrett, Sylvester.
  • Brady, Gerard.
  • Brady, Vincent.
  • Briscoe, Ben.
  • Brosnan, Seán.
  • Davern, Noel.
  • de Valera, Sile.
  • Doherty, Seán.
  • Farrell, Joe.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom
  • (Dublin South-Central).
  • Fitzsimons, James N.
  • Flynn, Pádraig.
  • Fox, Christopher J.
  • French, Seán.
  • Gallagher, Dennis.
  • Gallagher, James.
  • Gibbons, Jim.
  • Haughey, Charles J.
  • Herbert, Michael.
  • Hussey, Thomas.
  • Keegan, Seán.
  • Kenneally, William.
  • Killeen, Tim.
  • Killilea, Mark.
  • Lalor, Patrick J.
  • Lawlor, Liam.
  • Lemass, Eileen.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Browne, Seán.
  • Burke, Raphael P.
  • Callanan, John.
  • Calleary, Seán.
  • Cogan, Barry.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Gerard.
  • Cowen, Bernard.
  • Cronin, Jerry.
  • Daly, Brendan.
  • Leonard, Tom.
  • Leyden, Terry.
  • Loughnane, William.
  • Lynch, Jack.
  • McCreevy, Charlie.
  • McEllistrim, Thomas.
  • MacSharry, Ray.
  • Meaney, Tom.
  • Molloy, Robert.
  • Moore, Seán.
  • Morley, P.J.
  • Murphy, Ciarán P.
  • Nolan, Tom.
  • Noonan, Michael.
  • O'Connor, Timothy C.
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Malley, Desmond.
  • Reynolds, Albert.
  • Smith, Michael.
  • Tunney, Jim.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael J.
  • Wyse, Pearse.


  • Barry, Richard.
  • Begley, Michael.
  • Belton, Luke.
  • Bermingham, Joseph.
  • Boland, John.
  • Bruton, John.
  • Burke, Joan.
  • Clinton, Mark.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlan, John F.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Cosgrave, Michael J.
  • Crotty, Kieran.
  • D'Arcy, Michael J.
  • Deasy, Martin A.
  • Donnellan, John F.
  • Enright, Thomas W.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom
  • (Cavan-Monaghan).
  • Flanagan, Oliver J.
  • Gilhawley, Eugene.
  • Griffin, Brendan.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Horgan, John.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kenny, Enda.
  • Lipper, Mick.
  • McMahon, Larry.
  • Mannion, John M.
  • Mitchell, Jim.
  • Murphy, Michael P.
  • O'Brien, Fergus.
  • O'Brien, William.
  • O'Connell, John.
  • O'Donnell, Tom.
  • O'Keeffe, Jim.
  • O'Toole, Paddy.
  • Pattison, Séamus.
  • Quinn, Ruairi.
  • Ryan, John J.
  • Ryan, Richie.
  • Spring, Dan.
  • Timmins, Godfrey.
  • Tully, James.
  • White, James.
Tellers: Tá, Deputies P. Lalor and Briscoe; Níl, Deputies McMahon and Horgan.
Question declared carried.