Publicans demand more help as VAT move will ‘barely make a dent’
PUBLICANS have said that while the VAT cut for alcohol served in pubs is welcome, it does nothing for the 3,500 pubs that remain closed.
The July stimulus package will ensure that pubs can avail of a number of measures when reopening, including no commercial rates, a restart grant of at least €4,000 and a VAT reduction from 23% to 21%.
However, representative bodies for pub owners are warning the Government of the serious consequences in store for businesses if they’re forced to remain shut.
Drinks Ireland, the Licensed Vintners Association (LVA) and the Vintners Federation of Ireland (VFI) believe that in the current situation, where a two-tier sector exists in the drinks industry, with some pubs open and others closed indefinitely, the measures will not deliver.
Donall O’Keeffe, Chief Executive of the LVA, said: ‘The reduction in VAT is a start but we need to consider the reality of the new business model within which pubs are operating.
‘Government guidelines and Covid measures limit the capacity of pubs to trade which means demand is reduced, capacity is significantly decreased and consumers’ ability to spend in pubs is capped.
‘Government support needs to be cognisant of this reality,’ he added.
Kerry publican Niall O’Callaghan, who runs the Failte Hotel in Killarney, told the Irish Daily Mail that publicans nationwide are struggling to support their families.
‘The restart grant and VAT reduction will barely make a dent,’ he said. ‘The loss that pub owners are making at the moment is astronomical. Many are crippled in debt.
‘There are so many of us that have sons and daughters expecting to attend university later this year.
‘Where are they going to find the
€4,000 in September and €4,000 for academic costs in December?’
The representative groups for publicans had sought a reduction in the VAT rate for on-trade alcohol to support Ireland’s 7,000 pubs and maintain the 50,000 jobs in the sector.
The measure was intended to boost the viability of the businesses, rather than stimulate demand.
Padraig Cribben, Chief Executive of the VFI, said that measures are ‘only a start’. ‘The temporary reduction in the VAT rate on on-trade alcohol will assist in the short term but it will end,’ he said. ‘We need to consider the pubs that are closed, we need to get them open.’
Meanwhile, acting Chief Medical Officer Dr Ronan Glynn has warned that there is no guarantee that all pubs can reopen on August 10 because it’s ‘too early to say’, adding that the decision to reopen them will not be taken for another two weeks.