Public subsidy to aid Pubs and the sale of alcohol is an irrational idea

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Alcohol Action Ireland, the national independent advocate for reducing alcohol harm, has today (9 July) called on the government not to follow the calls from the alcohol industry to reduce alcohol taxes.

The strategic objective of public health policy, since the enacted Public Health Alcohol Act, has been to obtain a 20% reduction in the consumption of alcohol from 11 litres per capita to 9 litres per capita. The consumption rate for 2019 was 10.9 litres per capita.

Every euro gathered in VAT from alcohol in Ireland is met by three euro of public expenditure to manage the impact of alcohol harm. Every citizen is already paying the cost the impact of alcohol related harms to the tune of €720; the social and economic cost to Irish society is €3.6bn.

The idea that the new government, caught in the middle of a major public health crisis that is already demanding significant health expenditure, would choose to further subsidise a product that fuels a persistent public health problem, or aid the profitable industry that exploits it without impunity, seems to be patently absurd. Market dynamics will ensure that demand for reduced alcohol prices will emerge.

In the UK, a similar industry led campaign to have a reduction on alcohol VAT rates failed to materialise when the UK Chancellor while adopting a new VAT of 5% for six months aimed at stimulating the hospitality and leisure sectors exempted alcohol sales. 

The five major multinational alcohol producers who dominate the Irish alcohol market collectively hold in excess of €9 billion in cash reserves.

Commenting on the proposal that alcohol taxes would be reduced, Eunan McKinney, Head of Communications and Advocacy, said:

‘The idea that the public purse would subsidise the sale of alcohol, while at the same time, public policy seeks to have less alcohol sold to ensure better public health, is irrational.

The alcohol industry hold abundant cash reserves to assist in the recovery of pub businesses.’

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