Irish trade hails major duty cuts

The Irish pub trade has welcomed a major cut in duty and a reduction in VAT, saying it should increase "competitiveness".

The Irish government earlier this week announced duty cuts of 12 cent per pint of beer and cider, 14 per cent per half-glass of spirits and 60 cent per standard bottle of wine.

The reason for the cut is to stop the flow of cross-Border shopping, which has seen thousands of people stocking up on cheap alcohol in Northern Ireland.

However in his Budget, Minister for Finance Brian Lenihan said the measures would be reversed if they were not passed on to the consumer.

Lenihan also reversed a 0.5 per cent increase last year on the top rate of VAT. From January the highest rate of VAT will go back to 21 per cent.

Val Hanley, president of the Vintners' Federation of Ireland, said it was a positive move.

"It has been no secret that one of the main attractions for shoppers heading north of the border was the significant difference in the price of alcohol in the two jurisdictions," he said.

"This practical move shows that the government intends to provide stimulus to the economy despite the extremely difficult times we are in."

He added: "While price is the sole domain of each individual publican, our expectation is that consumers will benefit from these measures without delay."

The measures announced were in stark contrast to Alistair Darling's Budget on Wednesday which ignored industry calls for a lowering of duty to offset VAT returning to 17.5 per cent next month.