John Wilson: Why is alcohol so expensive to buy in Ireland?

Q: Why are wine, beer and spirits so expensive in Ireland?

A: Of all the FAQs aimed in my direction by Irish Times readers and other wine consumers, the most common relates to the price of wine in Ireland. Why is it so expensive?

It is partly down to size and geography. We are an island, so all wine must be shipped by sea and this can be expensive, particularly for small shipments. To cut costs, many of our less expensive wines are now shipped in flexitanks, giant plastic bags that fill an entire shipping container. The wine is then bottled here, or more commonly in the Netherlands, Denmark, Belgium or the UK. But it still needs to be sent on to Ireland.

Added to this, as a small nation we do not have the buying power of larger markets. In the past, some importers bought through the UK, but this still adds to the cost, and has become more complicated since Brexit. So we are doomed to pay a higher price for wine and for getting it here.

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All of the above factors make wine more expensive. However, beer and spirits, both produced in this country, cost much more here than in almost any other EU country. The reason for this is simple; we have some of the highest taxes on alcohol in the EU.

Spain, Portugal and Germany do not have any excise duty on wine. In France it is 3 cent per bottle. The northern European countries, which until recently, did not produce wine, tend to have higher excise duty on wine. It is €3.16 in Finland and €2.55 in the UK. However, Ireland has the highest excise duty of all, €3.19 per bottle. We also have the second highest excise tax on beer, and the third highest on spirits. All EU countries levy VAT on wine, spirits and beer. Ireland has a 23 per cent VAT rate on alcohol, lower than five other member states and higher than the remaining 19. We also have minimum pricing which means that wine, beer and spirits cannot be sold below a certain threshold, based on alcoholic strength.

All of this means that when you pay €8 for a bottle of wine in Ireland, €4.69 of that will go to the government. In France, where they have a 20 per cent VAT rate on wine, the equivalent would be €1.36. That is without taking into account the extra shipping, warehousing, and administration costs we face in Ireland.

It is hardly surprising that many Irish consumers take the ‘booze cruise’ to France, the UK or Northern Ireland. As a wine writer, I prefer to support our local drinks retailers who have a hard enough time making a living.