2025-12-09

11. Deputy Joe Neville asked the Tánaiste and Minister for Finance if his Department has considered increasing the domestic excise duty threshold for Irish brewers from the current 30,000 hl previously set at 20,000 hl prior to 2019; and if he will make a statement on the matter. [64556/25]

I welcome the Tánaiste here in his position as Minister for Finance and extend best wishes to him in his term ahead. My question is to ask the Minister for Finance if his Department has considered increasing the domestic excise duty threshold for Irish brewers from the current 30,000 hl, previously set at 20,000 hl prior to 2019, and if he will make a statement on the matter.

I thank Deputy Neville for the good wishes. I look forward to working with the Deputy on all things Kildare and all things national in this role, as we do already. I thank the Deputy for this question in what is an important and growing sector of the Irish economy. The EU legislation which governs the harmonisation of taxes on alcohol across the Union allows member states to offer certain excise relief to independent small breweries. Under Article 4 of the alcohol structures directive, member states may provide relief of up to 50% of their standard excise rate on beer produced by qualifying microbreweries in the EU. Where a member state provides such relief, the member state must also provide the relief to any qualifying microbrewery supplying that market but which produces its beer in another member state or in Northern Ireland. Ireland has implemented the excise relief for microbrewers of beer since 2005. Under Irish law, a microbrewery can qualify for relief if it produces up to 75,000 hl per annum, or 7.5 million litres, in the EU. Relief is available on up to 30,000 hl, or 3 million litres, produced by a qualifying microbrewery. The relief is granted at a rate of 50% of the standard Irish excise rate on beer. This means that the excise on relieved beer produced by a qualifying microbrewery is €11.27 per hectolitre per cent of alcohol instead of the standard rate of €22.55 per hectolitre per cent of alcohol. Two or more breweries working together with a licence, franchise, contract or other co-operation arrangement in place are permitted to avail of the relief if their joint production is up to 150,000 hl per annum. The excise relief of 50% is at the maximum permitted under the alcohol structures directive. Any change to increase the volume of beer subject to the excise relief would require legislative amendment. Policy considerations would include the impact on the overall cost of the relief and the fact that the measure would narrow the tax base. Also, the relief is not limited to Irish producers only so changing its availability would not solely benefit producers located within the State. EU-based microbreweries exporting beer into the State could be significant beneficiaries of any expansion to the volume threshold. However, we produce tax strategy group papers each year. On foot of the Deputy raising this issue, the prudent and sensible thing to do is keep the operation of the microbrewery relief scheme under review annually as part of the budgetary cycle and in the tax strategy group papers in advance of the next budget.

Like every other market, it is evolving continually. Microbreweries is an industry that really took off over the past number of years. It has grown really well but at the same has its own difficulties and considerations. There has been some contraction in the industry. There have been a lot of increases in costs which has caused difficulty for some of those breweries. The Tánaiste referenced breweries going together but ultimately there are individual businesses and breweries brewing on behalf of other companies and passing on to them. The problem is the person brewing it, when it has come through those customers, even though they are brewing on behalf of someone else, they can get caught in that. In the end, we might actually be restricting competition by not extending it.

That is a fair point. I will provide some figures which might be useful. I can send them on in tabular form to the Deputy with more detail. Since 2021, the amount of relief claimed by way of remittance is around €7 million to €8 million per annum. Most claimants are understood to opt for remission. In terms of claims made each year, there are around 70 to 90. To give an example, in 2024, the most recent year I have full figures for, the number of relief claims was 80. There were 74 in 2025 up to 31 August. We introduced the relief in 2005. We made changes in budget 2015 in the qualifying production threshold and the quantity on which the relief may be claimed was increased. In budget 2016, a measure was introduced by which claimants can opt to receive relief by way of remission as well as repayment. We took more measures in budgets 2017, 2020, 2023 and in budget 2025 we extended the relief to include high-strength cider and other fermented beverages other than cider and perry. We continue to keep this under review. It is a growing and an important sector of the Irish economy.

I welcome the Tánaiste's response especially his view that we have to keep monitoring this. Like every industry, we need to support it as best we can. It can be a fundamentally Irish product and industry. We want to protect it, look after it and enable it to grow considering it has its own difficulties. We all know the difficulties these sort of industries face. We spoke about it earlier with the whiskey industry and a lot of brewers that export to the US but face difficulties in that regard. It is important and incumbent on us to continue to look at this and how we can support the industry. I welcome the opportunity to discuss this with the Tánaiste tonight. I will continue to liaise with him and his Department.

I could not but help but put my hand to ask a further question when I heard a Deputy talk about something being fundamentally Irish. When I hear the words "whiskey" and "beer", I am automatically reminded of the farmers and tillage farmers in particular. While I know this is a request that will require cross-consultation with the Minister for Finance, the Minister for agriculture, Deputy Heydon, and the Minister for enterprise, Deputy Peter Burke, we have to look at an incentive or a tax regime that will allow tillage farmers to produce and provide the grains necessary to the brewery system. We cannot have whiskey and beer produced in Ireland that is primarily made from imported grain. We have find an incentive so that we can use Irish grains in Irish whiskey. A solution has been found in Scotland. There is a case for it. I would love a further opportunity to discuss this with the Tánaiste and the Ministers for agriculture and enterprise. It is possible. It would be good for the industry, both the brewers and the tillage farmers.

I thank Deputy Butterly. I am happy to take that opportunity. I will ask the Ministers for agriculture and enterprise to engage with her in relation to that. The ideal is an ecosystem that works for everyone but I do not profess to be extraordinarily knowledgeable on this. I would welcome that because tillage is a sector we want and need to support. It is one of the sectors, from an agricultural point of view, that aligns very much with our climate objectives. We have clear commitment in wanting to grow the amount of tillage farming in this country but it is a sector that often finds itself under pressure. I would welcome that conversation too. I agree with Deputy Neville. Not only is this an important, direct benefit to the Irish economy in producing Irish products we sell here and abroad, we have to support people in selling it abroad in a challenging environment. That is why the Minister for enterprise and I launched the action plan on market diversification. It has also now become a tourism product. Lots of distilleries have tourism experiences which bring people into our towns. I am committed to working with people on this. I am proud of the measures we have put in place. The tax strategy group papers are an important place to continue to monitor this matter in advance of future budgets.