Vat cut sought as campaign launched to 'protect our pubs'

Thu, 02 Jul, 2020 - 17:45

Evelyn Ring

From left, Padraig Cribben, chief executive, VFI, with Padraig McGann, president VFI and owner of McGann’s Bar, Monivea, Co Galway, at the launch of the ‘Protect our Pubs’ campaign today. Picture: Andres Poveda

A substantial Vat reduction to help pubs survive the Covid-19 pandemic is being sought by publicans and the drinks industry.

About two-thirds of pubs in Dublin reopened this week but outside the capital, over 60% of pubs remain closed.

The call for a 9% reduction in the hospitality Vat rate and extending the relief to alcohol sales in pubs is part of a new campaign called Protect Our Pubs.

The campaign is supported by the Licensed Vintners Association, the Vintners Federation of Ireland, and the Ibec representative group, Drinks Ireland.

The group, that collectively represent over 5,000 pubs in Ireland, says the Vat reduction is necessary with some pubs expected to be trading at a loss into early 2021.

The cost of implementing the tax measure until the end of the year has been put at €143m in a report by DCU economist, Tony Foley, due to be published next week.

Mr Foley says the measure will bring Ireland into line with what other EU countries were doing to support their drinks, hospitality and tourism businesses.

From left, Donall O’Keeffe, CEO, LVA with Ronan Lynch, chairman of the LVA and owner of The Swan Bar at the launch of the ‘Protect our Pubs’ campaign. Picture: Andres Poveda

Public health guidelines have resulted in some pubs operating at 50% capacity or less and with time limits imposed on customer visits.

Mr Foley says other EU countries are using temporary Vat reductions to support their drinks, hospitality and tourism businesses.

VFI chief executive, Padraig Cribben, says the impact of Covid-19 on Ireland's drinks and hospitality industry has been devastating.

As well as experiencing a collapse in business the financial burden of adapting to new public health measures was significant.

“For many, it will be too much, and they won't be in a position to reopen on July 20,” says Mr Cribben.

LVA chief executive, Donall O'Keeffe, says pubs had to change their business model and the Vat model should change to reflect that.

“Public support for our campaign to protect Ireland's pubs is crucial to ensure that the Government understands the gravity of the situation our industry is in,” he says.

Drinks Ireland director, Patricia Callan, says the Vat change will “tangibly deliver” for the drinks industry and reflected the Government's stated ambition.