A banner at a shopping center in Northern Ireland

More and more drinkers from the Irish Republic are flocking north to get cheaper booze – and will pump $134 million into Northern Ireland’s economy this year.

That’s what Anthony Foley, an economics lecturer at Dublin City University, has said, following Tuesday’s emergency budget in the Republic.

He told a Northern Ireland newspaper that the Republic will lose an estimated $134 million in taxes in 2009 as southern shoppers continue to head north.

Many drinkers in the Republic of Ireland go to Northern Ireland to buy their alcohol, which is much cheaper because of a strong Euro and because of higher sales taxes in the Republic. A bottle of whiskey can be around $13.50 cheaper in Northern Ireland.  

This, along with the current economic downturn that has hit the Irish republic hard, has made 2009 a very difficult year for owners of restaurants, pubs and liquor stores in Republic.

The Irish Minister for Finance Minister Brian Lenihan told the Irish parliament on Tuesday that he would not increase the tax on alcohol because of “the substantial risk of the loss of revenue of the purchases of these items in Northern Ireland.” However, he increased fuel tax by five cents a litre and the tax on a packet of cigarettes went up by €0.25 ($0.33)

The flocking of southern shoppers to Northern Ireland has been a boom for a number of border towns, such as Newry, Enniskilllen and Derry.

Kieran Tobin, the chairman of the Drinks Industry Group of Ireland, the trade association for the Irish drinks industry, has predicted that in 2009 10 percent of off-license sales (that is, alcohol purchased in stores rather than in pubs and restaurants). Up to 9,000 jobs could be lost in all sectors of the alcohol industry in 2009, Tobin said.

Last month the Restaurants Association of Ireland, the trade association for the Irish restaurant industry, heard at its conference was that restaurateurs are seeing a 10 percent drop in customers, and that diners are spending up to a fifth less than they used to.

And in yet more bad news for the hospitality industry, statistics released last month show that the Irish consumption of alcohol fell last year for the first time in a decade.