Drinks industry warning if Johnson becomes UK PM
The Drinks Industry Group of Ireland called on the Government to reduce alcohol excise tax by 15% over the next two years.
A no-deal Brexit could lead to a “recession-type” decline in the Irish drinks and hospitality industry, it has been claimed.
The Drinks Industry Group of Ireland (DIGI) said that if Boris Johnson becomes the next UK prime minister, as expected, it could lead to a decline in the sector, particularly in rural Ireland.
DIGI chairwoman Rosemary Garth said: “The Government must do everything in its power to reduce the grave harm that a no-deal Brexit would have on thousands of businesses and more than a hundred thousand jobs.”
Mr Johnson has said that he will take the UK out of the EU with or without a deal on October 31.
If that transpires, the UK and EU will have to agree a separate bilateral trade deal, a process that could take many years, DIGI predicted.
It said such a scenario could have “disastrous ramifications”, particularly for the drinks and hospitality businesses that depend on easy, tariff-free access to the UK market.
The group has called on the Government to reduce alcohol excise tax by 15% over the next two years to help businesses cope with rising costs.
It said Ireland has the second highest excise tax in the EU, which puts businesses at greater risk post-Brexit.
Ms Garth said the sector had experienced immense growth in recent years but “that could change with Boris Johnson in Number 10”.
“His election would greatly increase the chance of a no-deal Brexit, which, by extension, would jeopardise the long-term growth prospects of Irish drinks and hospitality businesses that depend on stable British tourism and exports markets,” Ms Garth said.
“A large-scale and long-term reduction in visitor numbers from the UK would have dire ‘recession-type’ effects on the drinks and hospitality sector, particularly in rural Ireland, and lead to job losses and business closures.”
She added: “By incrementally reducing excise tax on alcohol in Budget 2020 and Budget 2021, businesses, particularly the most vulnerable in rural Ireland, will have more available funds to weather the toughest moments of a no-deal Brexit, and the ability to continually invest in job creation, commercial expansion, and product and service innovation.”
The drinks industry directly and indirectly employs 90,000 people in pubs, restaurants, breweries, distilleries, and off-licences.
The wider hospitality sector employs over 175,000 people, or nearly 8% of all Irish workers, and generates 1.4 billion euro in exports per annum.