(Independent) - IRELAND has the highest levels of excise on wine in the EU with half the cost of an average bottle going to the State, the industry claims.

The Irish Wine Association has urged the Government to reverse the €1 excise slapped on a bottle of wine in last December's Budget.

Launching its annual report, the association said excise contributions from the wine industry are equivalent to 27pc of the total alcohol excise collected.

Michael Foley, Irish Wine Association chairman, said the excise increase imposed was damaging the sector. "The (report) outlines the unprecedented challenges that the wine industry has faced in recent years," Mr Foley said.

"Ireland has the highest levels of excise in the EU and as a result is one of the most expensive countries to purchase wine.