Irish consumers pay most for cigs and booze in Europe

Cookie_Monster

Ireland had the highest prices for alcohol and tobacco products in the EU-27 last year, according to new figures.

In 2010, the cost was 170pc of the average due mainly to our high excise rates.

The cost of food and non-alcoholic beverages in Ireland was the second dearest in Europe, just behind Denmark, at 120pc of the average.

And overall Ireland had the fifth highest prices for consumer goods and services at 118pc, according to figures from Eurostat, the statistics office of the EU.

Ireland was below the EU average in two areas: clothing, which came in at 95pc and consumer electronics at 94pc.

Food prices were the highest in Denmark and lowest in Bulgaria.

For restaurants and hotels, price variations were more significant, with price levels ranging from 45pc of the average in Bulgaria to 153pc of the average in Denmark.

http://www.independent.ie/national-news/irish-consumers-pay-most-for-cigs-and-booze-in-europe-2807485.html

Anyone surprised really?

Of course the massive duty on booze and cig doesn't really help the issue but food being so expensive is crazy.
Just shows how little competition and price gouging there is in the Irish grocery market that helps sustain this

later12

In other news, eggs come from chickens

http://www.irishtimes.com/newspaper/finance/2011/0622/1224299384899.html

1huge1

I believe excise duty on alcohol should be reduced that is for sure, asides from the obvious profiteering of many Pub/club owners, there is a case to make especially when the government is making such a push for tourism lately.

I would be interesting in seeing a laffer curve based on the current taxation policy, I imagine they would earn more from taxes on alcohol by actually reducing it, I believe organisations like the AA etc have too much influence on the government here, punishing everyone with their motives of high prices when really it has done nothing to curb our binge drinking culture, instead punishing the average joe who would just like a pint on a weekend etc, here in Germany the prices are small fractions of the irish prices yet you don't see people getting sick on the side of streets in the early hours of the morning.

As for cigarettes, wouldnt be my area of expertise but I do believe the black market can sometimes be less of a tax issue and more of a policing issue.

Dannyboy83

I think it's totally unrealistic to be expect the Gardaí and Customs to be able to contain even a third of the cigarette smuggling.
I think they're doing remarkably well considering the resources they have.

It's not a policing failure, it's a policy failure.

http://www.breakingnews.ie/ireland/eu-claims-ireland-has-big-problem-with-tobacco-smuggling-509980.html
Europol has said Ireland now has one of the worst tobacco smuggling problems in the European Union.

http://www.sbpost.ie/news/ireland/warning-over-further-cigarette-tax-increases-57122.html
Tax levels on tobacco have reached the point where any further tax increases will lead to lower tax yields, according to a new Revenue report.

Atilathehun

Most dole money is spent on ciggs and booze. Most of the remainder is spent in the bookies:o
Most dole money paid out is back in government coffers in a few days through taxes on ciggs abd booze.
If government taxed the gee gees heavily enough most of the remainder would follw the cig and booze money back to where it came from:cool:

The bit missing, is used to pay the interest on the money, borrowed to pay the PS staff push the money round in never ending circles of love.:D

Nody

Problem is that once alcohol/tobacco smugglers are in business lowering the taxes (with out cutting them by 75% or similar) means the amount of smuggling tend to remain the same in terms of amount coming in.

Oh_Noes

Atilathehun wrote: »

Most dole money is spent on ciggs and booze. Most of the remainder is spent in the bookies:o

Just because you spend all your dole money on cigarettes, drink and betting doesn't mean that everyone is doing it. Most of the people I know who've lost their jobs and can't find a new one are spending most of it on mortgages or their kids.

That point about the excise on cigarettes is really interesting though. The idea that they can't raise it any more because they will start losing money should really make them take a long hard look at their practices. I don't smoke but I always remember the idea being put forward that raising the price of cigarettes would discourage people from smoking. In reality, it has fuelled the growth of the black market which has just become a monster in terms of scale and impossible to police. It really is catch 22.

I was surprised at the prices of alcohol, I thought it had come down or at least slowed down a lot in terms of inflation in the last few years.

Also, Denmark must be a wonderful place if they are actually out-pricing Ireland on everything and they haven't got the emigration problem that we have.

dan_d

Have to say, I couldn't give 2 curses about the price of either alcohol or cigarettes, not being a smoker or a heavy/regular drinker.When it comes to smoking, if you want to indulge in a smelly habit that introduces addictive drugs into your body, then knock yourself out.And accept that part of that is the cost of the things.

I accept the point about the black market but I really don't think that we should be lowering the price of cigarettes based on this. I also agree with the point about lowering rent costs to contribute to a drop in prices. I actuallu find it hard to believe that nobody in Gov has addressed the rent problem yet....it's an obvious part of the solution (but then, when have governments and their advisors ever gone for the 'obvious' solutions..)

Bullseye1

We must be up there on petrol and diesel too. And the majority of the cost is government based. I always laugh at the low tax country.

Nody

Oh_Noes wrote: »

Also, Denmark must be a wonderful place if they are actually out-pricing Ireland on everything and they haven't got the emigration problem that we have.

They have a different approach to unemployment; you get a very high benefit (up to 90% of your leaving salary capped at 495 EUR a week) capped at 2 years in every 3 years (and you only get this benefit if you worked at least 1 year previously). They also offer extensive and impressive retraining oppertunities over your full working career.

That is the security side. On the other side of the coin companies can actually let people go (shock and horror for unions everywhere) relatively easily with out jumping through 15 hoops while doing backflips or paying huge redundancies and hence dare to hire people who may not be perfect to try them on. Hence there is a lot of movement in the work force and people reskill to what is needed rather then work for life style employment/attitude.

So you have a flexible legislation for companies to hire & fire and good retraining supplied by the state; neither which is the case in Ireland and hence Denmark don't have a huge emigration.

1huge1

Bullseye1 wrote: »

We must be up there on petrol and diesel too. And the majority of the cost is government based. I always laugh at the low tax country.

Not as high as you might believe, Prices are certainly higher in the UK, Belgium, The Netherlands (highest in the EU), Germany, France, Austria and more that I don't recall just right now.

RichardAnd

Bullseye1 wrote: »

We must be up there on petrol and diesel too. And the majority of the cost is government based. I always laugh at the low tax country.

When I was over in Manchester in March, petrol was something like 1.39 pounds a litre. I'm not saying that what we pay isn't wrong but taxing the s**t out of fuel seems to be a policy across Europe.

Nody

RichardAnd wrote: »

When I was over in Manchester in March, petrol was something like 1.39 pounds a litre. I'm not saying that what we pay isn't wrong but taxing the s**t out of fuel seems to be a policy across Europe.

Because fuel is in constant supply (i.e. constant income stream) and you can do it and claim to be green (i.e. minimize citizen uproar about it by asking them why they don't want to save the planet even though the impact compared to cattle etc. is minimal).

RichardAnd

Nody wrote: »

Because fuel is in constant supply (i.e. constant income stream) and you can do it and claim to be green (i.e. minimize citizen uproar about it by asking them why they don't want to save the planet even though the impact compared to cattle etc. is minimal).

My summary of Green policy is simple; save the crop from blight by setting fire to it.

djpbarry

1huge1 wrote: »

I believe excise duty on alcohol should be reduced that is for sure, asides from the obvious profiteering of many Pub/club owners...

How do pub/club owners profit from excise duty?

1huge1 wrote: »

I would be interesting in seeing a laffer curve based on the current taxation policy, I imagine they would earn more from taxes on alcohol by actually reducing it...

It’s a while since I looked into this, but I seem to recall that excise on alcohol in Ireland is not really that high. Off the top of my head, I think the excise on a measure of spirits is about €0.50, but I’m open to correction on that.

I’d be of the opinion that the cost of a night out in Ireland is high for the simple reason that people are prepared to pay high prices. Take restaurant prices for example – they are absolutely extortionate in Ireland. I was in a Thai place in Maynooth recently (a pretty poor Thai place) where the average price of a main course was around about €16. What I found particularly disturbing was the fact that nobody I was eating with seemed to think this was particularly expensive. Here in London, I can get top quality Thai food for about £8.

Atilathehun wrote: »

Most dole money is spent on ciggs and booze.

Source?

1huge1

djpbarry wrote: »

How do pub/club owners profit from excise duty?

I never meant that they profit on that, I meant that even on top of this high excise duty the profit margins at many pubs and nightclubs are unbelievable, its only in the last 2 years we have seen how much profit making they have been making, I've seen a few pubs in Limerick that used to charge €4.50 for a pint and now can still make a profit when the price is closer to €3.

As for the excise duty not being so high, I don't have any figures, just the fact that supermarkets like Tesco etc would have it close to as low as it could possible get (also true with Aldi and Lidl as their profit margins are very low), and even after that our prices are higher than any ther country I've been to, even one's with much less competition in the supermarket.

Surely a whiskey like Jameson or Tullamore Dew which are produced in Ireland should be cheaper here than in other countries, yet every country I have visited in Europe has these whiskeys for cheaper prices, surely the excise duty is to blame for this.

Nijmegen

They have a different approach to unemployment; you get a very high benefit (up to 90% of your leaving salary capped at 495 EUR a week) capped at 2 years in every 3 years (and you only get this benefit if you worked at least 1 year previously). They also offer extensive and impressive retraining oppertunities over your full working career.

There's no doubting that Denmark is an impressive state with a great security net. The government is also twice the size as a % of the economy as in Ireland, and you pay for what you get.

On the issue in general, I have yet to see a credible study from anywhere relating to how raising or lowering consumption taxes will affect the tax take.

It's easy to say 'Drop the tax and consumption will go up', but a 1% swing in the tax has massive revenue implications that have to be met.

I say this as a low tax kinda guy. But I'd rather not make tax policy on the back of an envelope on hopes and prayers. Of course, I believe the government releases the figures that fit their vision also.

djpbarry

1huge1 wrote: »

I never meant that they profit on that, I meant that even on top of this high excise duty the profit margins at many pubs and nightclubs are unbelievable..

Ok, fair enough.

1huge1 wrote: »

As for the excise duty not being so high, I don't have any figures, just the fact that supermarkets like Tesco etc would have it close to as low as it could possible get (also true with Aldi and Lidl as their profit margins are very low), and even after that our prices are higher than any ther country I've been to...

I don’t know about that – supermarket prices for beer are comparable here in the UK to what they are in Ireland. A bottle of beer will typically set you back somewhere in the region of £1.60 - 2.00.

1huge1 wrote: »

Surely a whiskey like Jameson or Tullamore Dew which are produced in Ireland should be cheaper here than in other countries, yet every country I have visited in Europe has these whiskeys for cheaper prices...

We talking bottles or measures? Bottles of whiskey, maybe, but in my experience, €4 – 5 per measure in a bar is a fairly standard price.

BKtje

4-5 euro a measure is quite high though. In Switzerland where I work (in a city akin to galway) we have a measure for 5chf (€4.20). Due to the current exchange rate prices are quite similar though a couple years ago switzerland would have been much cheaper.

This doesn't tell you very much until you factor in the minimum wages. Ireland: €7.65 Switzerland: (doesnt officially have one but students earn about 20chf an hour) €16-17.

Basically I can buy a bit over 3 shots per hours wage while in ireland it would be 1 and a half? I can only imagine that thats mainly due to higher excise?

djpbarry

BKtje wrote: »

Basically I can buy a bit over 3 shots per hours wage while in ireland it would be 1 and a half? I can only imagine that thats mainly due to higher excise?

No, not really. Excise on a standard measure (37.5 ml) of a spirit containing 40% alcohol works out at just under €0.47 (based on excise duty of 31.13 c/L).

Geuze

http://ec.europa.eu/taxation_customs/taxation/excise_duties/alcoholic_beverages/rates/index_en.htm

Excise rates on alcohol across the EU.

Also a pdf document:

http://ec.europa.eu/taxation_customs/resources/documents/taxation/excise_duties/alcoholic_beverages/rates/excise_duties-part_i_alcohol_en.pdf

Geuze

Beer excise duty is 15.71 per hectolitre per %.

So 15.71 cent per litre per %.

So 37.5 cent per pint of 4.2% beer.

Geuze

In the UK, as of end-March 2011, it's 17.32 stg per hectolitre per %.

That's 17.32 pence per litre per %.

That's 41p per pint of 4.2% beer.

So about 46 cent per pint.

So UK excise duty on beer is now higher than Irish excise duty.

UK VAT is now 20%, while our VAT rate is 21%.

So there is very little difference in tax rates.

1huge1

Geuze wrote: »

In the UK, as of end-March 2011, it's 17.32 stg per hectolitre per %.

That's 17.32 pence per litre per %.

That's 41p per pint of 4.2% beer.

So about 46 cent per pint.

So UK excise duty on beer is now higher than Irish excise duty.

UK VAT is now 20%, while our VAT rate is 21%.

So there is very little difference in tax rates.

Thats interesting indeed, so what is with the big difference's in prices, and for the record the UK isn't cheap on alcohol either so I don't see why we keep comparing ourselves to them.

I mean, I live in Bavaria, where most beer is around 5.3%, Munich in particular is the most expensive place in Germany, yet I can go into my local Tengelmann (supermarket) and buy the most popular beer here in a glass bottle 0.5L for 60-70c.

I mean this is who we should be competing with, not the already over priced UK or the very cheap Spain.

So this is just a question, if the UK has just about the same rate of excise duty as us give or take, whats with the price differences in the off licence of tesco in Ireland and tesco in Northern Ireland, is it really just higher margins or is there something else too it?

Geuze

Higher costs, overheads, etc.

Brewer charges more in RoI as there is less competition.

Brewer charges more in RoI as people willing to pay.

BKtje

djpbarry wrote: »

No, not really. Excise on a standard measure (37.5 ml) of a spirit containing 40% alcohol works out at just under €0.47 (based on excise duty of 31.13 c/L).

It would be interesting to know why price of a basic pint is so much (when taking min wage into account) cheaper in CH than it is in Ireland. Switzerland is not a cheap place to live yet booze and cigarettes are of a similar price yet wages are hugely different.

Geuze wrote: »

Higher costs, overheads, etc.

Brewer charges more in RoI as there is less competition.

Brewer charges more in RoI as people willing to pay.

I'd really like to know what these higher costs and overheads would be and also why people would be willing to pay more. I understand that prices went up when people were cash flush to maximise profits but I can't understand why these prices aren't dropping more substantially now that people are cash poor. Are publicans deciding that smaller profits are just not worth it and calling it a day or are they really struggling and needing to charge these high prices to try to stay in business (which in turn is driving people away).

Thanks for the links to EU excise duty, must try to find similar info for switzerland. I don't think there is very much excise duty here as they are talking about bringing it in (or perhaps raising it?).

All in all an interesting subject.

Nijmegen

What makes a pint of beer more expensive in Ireland than the UK? I tried to get figures of some annual reports but IE wasn't broken down sufficiently. I will, however, offer some guesses:

Average price of a pint in Ireland is €4.50; in the UK €3.36, a 34% premium in Ireland.

Minimum wage UK: €1,138.54 per month. Minimum Wage Ireland: €1,461.85 per month. A 28.3% premium. In the UK there is no statutory premium payments, for example for Sunday work, but one expects it gets paid in certain instances. I cannot, however, provide a broad analysis to you on how this affects pay levels as it is apples and oranges versus Ireland.

Of course, the people who brew the pint, drive the barrel to the pub and so forth need to be paid!

I think that if you then go and look at rent prices, one can easily see how a pint might have a 34% premium versus the UK.

Geuze

Recently, the catering firm at the Aviva stadium threatened to buy Guinness stout from the UK, as Guinness charge less over there.

http://www.sbpost.ie/news/ireland/diageo-cuts-drink-prices-for-aviva-bars-51099.html



"Irish publicans pay €131.66 for a 50-litre keg of Guinness. The ex-duty price of the same keg to the on-trade in Britain is half that, at £54.15 (€66). Even after payment of Irish duty, the cost of importing Guinness to Ireland would be only €99.33 per keg, a saving of 33 per cent."

The 131.66 per 50L keg includes excise duty of 32.99, so the brewer gets 98.67 euro for 50L.

Assuming 88 pints per keg, the brewer gets 1.12 per pint.





Keg bought from Diageo in the UK (although brewed here!!) = 66 euro + 33 duty = 99 euro.

Keg bought from Diageo IRL = nearly 134 euro.

Guinness charge more here, as they are very dominant.

BeeDI

Atilathehun wrote: »

Most dole money is spent on ciggs and booze. Most of the remainder is spent in the bookies:o
Most dole money paid out is back in government coffers in a few days through taxes on ciggs abd booze.
If government taxed the gee gees heavily enough most of the remainder would follw the cig and booze money back to where it came from:cool:

The bit missing, is used to pay the interest on the money, borrowed to pay the PS staff push the money round in never ending circles of love.:D

Only slightly harsh statement I'd say. As other posters have said, the brewers over here do what good capitalists do. They charge what the market will bear for any product, booze in this case.
People at work haven't time to be drinking, and generally speaking would prefer not to pizz away hard earned cash.
People who get cash for nothing, more likely to fritter it, in the boozer.

BeeDI

1huge1 wrote: »

I never meant that they profit on that, I meant that even on top of this high excise duty the profit margins at many pubs and nightclubs are unbelievable, its only in the last 2 years we have seen how much profit making they have been making, I've seen a few pubs in Limerick that used to charge €4.50 for a pint and now can still make a profit when the price is closer to €3.

As for the excise duty not being so high, I don't have any figures, just the fact that supermarkets like Tesco etc would have it close to as low as it could possible get (also true with Aldi and Lidl as their profit margins are very low), and even after that our prices are higher than any ther country I've been to, even one's with much less competition in the supermarket.

Surely a whiskey like Jameson or Tullamore Dew which are produced in Ireland should be cheaper here than in other countries, yet every country I have visited in Europe has these whiskeys for cheaper prices, surely the excise duty is to blame for this.

I know a company here in Ireland who give a bottle of Baileys as a gift to many if not all their customers at christmas. Their Dutch office purchases the Baileys in Holland on their behalf and ships back to Ireland. They save a wad of lolly in the process.:P

1huge1

BeeDI wrote: »

I know a company here in Ireland who give a bottle of Baileys as a gift to many if not all their customers at christmas. Their Dutch office purchases the Baileys in Holland on their behalf and ships back to Ireland. They save a wad of lolly in the process.:P

I wouldn't doubt it, if it wasn't so ridiculous it was be hilarious, but it really is a issue we have to sort out, we have been pushed around by these anti drinking lobbyists for far too long who believe the only way to stop our binge drinking culture is to increase the price, instead of getting to the source of the problem and trying to change the culture all they are doing is punishing the average person.

I know it seems like such a minor issue with all that is going on, but it really get's on my nerves.

Nijmegen

1huge1 wrote: »

I wouldn't doubt it, if it wasn't so ridiculous it was be hilarious, but it really is a issue we have to sort out, we have been pushed around by these anti drinking lobbyists for far too long who believe the only way to stop our binge drinking culture is to increase the price, instead of getting to the source of the problem and trying to change the culture all they are doing is punishing the average person.

I know it seems like such a minor issue with all that is going on, but it really get's on my nerves.

As has been pointed out, our excise duties on alcohol are only a small part of the story. Why should the exchequer give punters a discount when the producers are raking in the margin?

1huge1

Ya thats true, but its not like we can force them to lower the prices, the current state of the market should be enough for them to reduce the prices but some of them are not living in the real world.

Diageo Ireland appears to be the real offender here.

Nijmegen

1huge1 wrote: »

Ya thats true, but its not like we can force them to lower the prices, the current state of the market should be enough for them to reduce the prices but some of them are not living in the real world.

Diageo Ireland appears to be the real offender here.

Do bear in mind costs versus others. But yes, they do seem to be creaming good margin off in Ireland.

The state should not have to offer a discount. If they drop their prices, tax comes down too. So let them make the running.

1huge1

I've no doubt costs are higher in Ireland, but the fact is when Diageo are charging the Irish market more for Guinness when its produced here (thus incurring those higher employee costs etc) and then being shipped to the UK and yet its still cheaper there.

So even with our high costs there still is a large amount of profiteering on the part of Diageo.

I'm in agreement with you though of course.

But we need a solution, but if its not gonna be reducing the tax, I would be interested to see how we can solve this problem if market conditions alone haven't been enough.

Nijmegen

1huge1 wrote: »

I've no doubt costs are higher in Ireland, but the fact is when Diageo are charging the Irish market more for Guinness when its produced here (thus incurring those higher employee costs etc) and then being shipped to the UK and yet its still cheaper there.

So even with our high costs there still is a large amount of profiteering on the part of Diageo.

I'm in agreement with you though of course.

But we need a solution, but if its not gonna be reducing the tax, I would be interested to see how we can solve this problem if market conditions alone haven't been enough.

We have a minimum wage, how about a maximum booze price? That'd cement our image abroad....

I think, in general, that there is margin creaming in Ireland. Tesco supposedly makes much better margins in Ireland than the UK.

Ultimately, people would have to vote with their feet on that. It's certainly not governments place to introduce price controls on luxury goods.

1huge1

Nijmegen wrote: »

We have a minimum wage, how about a maximum booze price? That'd cement our image abroad....

I think, in general, that there is margin creaming in Ireland. Tesco supposedly makes much better margins in Ireland than the UK.

Ultimately, people would have to vote with their feet on that. It's certainly not governments place to introduce price controls on luxury goods.

I'm starting to believe that the only way were going to become more on par with our european counterparts is not through us having falling prices (in some cases that has been through but it hasn't been enough), but through our prices not increasing as quickly as other countries.

Which is what we have seen for the last 12 months or so.

Geuze

I was surprised that the Competition Authority allowed Heineken, owner of Murphy's stout, to acquire Beamish stout.

It was allowed.

So we moved from three suppliers of stout (excl micros) to two suppliers.

Madness.

http://www.tca.ie/images/uploaded/documents/M08011%20Heineken-S&N%20Determination%20public.pdf