Supermarkets picking up lost pub booze sales
THE minimal impact of Covid-19 pub closures on alcohol sales was ‘striking’ with supermarkets picking up extra booze sales, according to pre-budget submissions prepared for Finance Minister Paschal Donohoe.
Mr Donohoe was also warned that a cut to VAT for the hospitality sector would be compromised by the decline of international tourism.
The Minister announced in Budget 2021 that VAT for the hospitality sector would be reduced to 9%.
The full-year cost of the move was estimated at €320m but officials said it had a significant downside as compared with when the same step was taken during the last recession.
‘One of its primary objectives in 2011 was to attract the international tourist but it is unclear as to when, if ever, this market comes back on stream in the manner seen in the past,’ said the pre-budget submission.
Another briefing on taxing the ‘old reliables’ said it was remarkable how little impact the closure of pubs had on the sale of alcohol, with supermarkets being the main beneficiaries.
The submission said: ‘It is striking that wine volumes released for clearance in the year to August are 12.3% ahead of the same period last year, notwithstanding the fact that about 17% of wine was sold through the trade in 2019.’
It added that it was similarly striking that beer sales had only declined by 13.3% considering nearly two-thirds of beer sold in 2019 was in pubs.