08/04/2009

Post Budget Border Bonanza To Continue

Northern Ireland is not only to continue benefiting from cross border trade, but, thanks to the Irish Republic's latest budget measures, looks set to gain even more trade.

On foot of the Republic's Finance Minister Brian Lenihan's 'emergency' Irish budget on Tuesday, NI's economy will be benefit to the tune by £91 million this year alone as shoppers from the Republic continue to flock north.

An Irish economist, Anthony Foley, a senior lecturer in economics at Dublin City University, made known his estimates yesterday.

The author of a report on the state of the drinks industry in Ireland 'Drinks Market Performance 2008' - published last month - said: "It is estimated that the Republic will lose €101m (£91m) in excise and VAT revenue in 2009 as shoppers continue to head north."
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The losses so far were acknowledged by Brian Lenihan in the Dáil when he said that he would not be increasing the duty on alcohol because of "the substantial risk of the loss of revenue of the purchases of these items in Northern Ireland".

However, Mr Lenihan increased fuel by five cents a litre and a packet of 20 cigarettes by 25c, but vitally, he did not make any change to the 21.5% VAT rate.

Mr Foley believes the border boom will still continue apace in towns such as Newry, Enniskilllen and Londonderry.

He said this is because of the "vast price gap" that already exists with consumers saving as much as €10 (£9) on a bottle of spirits.

"We estimate about 10% of the Republic's off-licence sales will be taken by the North in 2009," said Mr Foley.

That's even with there being no duty increase on alcohol in this week's financial package.

See: Irish Budget Targets Cross Border Shopping

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