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Harris’s price measures on alcohol and cigarettes rejected

Minister Harris wrote a detailed letter to Minister for Finance Michael Noonan on the issue of duties on tobacco and alcohol two weeks before the announcement of Budget 2017.

In the letter seen by the Medical Independent (MI) following a Freedom of Information request, the Minister made specific recommendations on the pricing of tobacco and alcohol.

Minister Harris sought a €1 increase in the price of a 20-pack of cigarettes. However, a price increase of only 50 cent was announced in Budget 2017 on 11 October last.

With alcohol, Minister Harris sought an excise duty increase on spirits, beer, cider and wine. There was no excise duty increase included in Budget 2017 on any of these items.

“I am seeking an increase of €1 on a pack of 20 cigarettes, with a pro rata increase for all other tobacco products,” Minister Harris wrote to Minister Noonan on 29 September last.

“It is estimated that this increase could lead to an increased yield of €128.3 million, though that is subject to market elasticity.”

The Minister for Health recommended the increase of €1 against the backdrop of seeking a reduction in tobacco consumption.

“The Government has agreed that pricing is a key means of reducing tobacco consumption,” wrote Minister Harris.

“Tobacco use is a significant cause of ill health in Ireland. Almost 6,000 of our population die annually from tobacco-related disease and tobacco use has been estimated to cost Irish society €10.7 billion annually.”

In terms of alcohol products, the Minister sought an excise duty increase across the board.

“Alcohol is responsible for three deaths every day and has been estimated to cost the State €1.78 billion annually,” wrote Minister Harris.

Minister Harris sought an excise duty increase of 20 cent on spirits per half glass (3.55cl), a 20 cent increase on beer per pint (56.8cl), a 20 cent increase on cider per pint (56.8cl) and a 75 cent increase on wine per bottle (75cl).

“Based on the most recent Tax Strategy Group Report, it is estimated that these excise increases could yield returns of approximately €256.1 million cumulatively.”

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