6th October, 2014 by Becky Paskin

Sales of Irish whiskey in Ireland, the category’s second largest market, have plummeted by almost 20% in the past year as excise taxes continued to soar.

The drop has prompted the Irish Spirits Association (ISA) to call on the government to lower the amount of tax paid on a bottle of spirits, which has risen by 42% in the last two years.

Tax now accounts for €17 of the price of a standard bottle of spirits.

The ISA claims the increasing excise rate is also impacting general spirits sales, which are also down 9.6% in the year to June 2014.

Peter Morehead, chair of the ISA and production director at Irish Distillers, said: “Revenue clearance figures show that high excise rates have hit our home-grown spirits significantly. Between June 2013 and June 2014, Irish whiskey sales have experienced a massive 19.3% drop.”

He added that continued declines could have a more significant impact on the Irish whiskey industry, which is currently receiving significant investment.

“Ireland is the second biggest market for Irish whiskey, with 350,000 cases sold here at a value of €30m,” he continued.

“The industry is going through a major growth phase, with over 20 new projects coming online over the next few years and investing over €1bn in Ireland. These new entrants rely on a strong home market to launch their brands and showcase Ireland to tourists as the home of Irish whiskey.

“Unfortunately, high excise rates mean that Ireland is simply too expensive for many of these companies to sell into.”

However, local health groups claim higher tax rates have already reduced alcohol consumption among the Irish, one of the biggest drinking nations in Europe.

Alcohol Action Ireland claims the 2013 excise duty increase resulted in a 9.5% drop in consumption, while excise revenue increased by €150 million.

Suzanne Costello, CEO of Alcohol Action Ireland, said: “We have seen in recent years that increases in excise duty have reduced alcohol consumption and generated significant additional revenue for the Exchequer, while cuts in excise duty have had the opposite effect.

“Therefore, to cut excise duty makes no sense for the physical, mental or financial health of the nation.”