Vintners Call for Targeted Government Support in Budget

The Vintners Federation of Ireland (VFI) is appealing to the Government to introduce essential support measures for the pub sector in the upcoming Budget. In a bid to save struggling pubs, the VFI is urging for business tax reductions to alleviate the mounting financial pressure on publicans across the country.

According to the federation, many Irish pubs are on the verge of closure due to skyrocketing operational costs. From soaring labour costs to increased energy and water bills, as well as high taxes, pub owners are finding it increasingly difficult to stay afloat.

“The Pub Trade is at a Breaking Point”

VFI Chief Executive Pat Crotty issued a stark warning about the future of the pub industry. “Without meaningful government intervention, we will see a wave of closures that will impact communities across the country,” Crotty said, highlighting that long-term support is critical, as one-off schemes are insufficient to address the sector’s challenges.

Rising Costs Threaten the Survival of Pubs

The VFI’s recent research has laid bare the economic pressures faced by pubs. For every pint sold, the Government takes €1.77, while drink suppliers receive around €1.50. Meanwhile, staff wages account for €1.41, leaving publicans with only 17 cents in profit per pint after covering other expenses such as insurance and TV sports subscriptions.

The VFI is advocating for a 7.5% reduction in excise duty, which would enable publicans to lower prices and increase profit margins, thereby providing some financial relief for the struggling sector.

Concerns Over Living Wage and Labour Costs

Along with the tax cuts, the VFI is also pushing for the Government to reconsider its plans to introduce a living wage. The Government is reportedly set to raise the national minimum wage by over €1 per hour in Budget 2025, following a recommendation by the Low Pay Commission to increase the rate to €13.70 per hour.

The VFI believes that such a significant hike in labour costs could spell disaster for many pubs. In a statement, the federation warned, “The current economic climate does not allow for such a significant increase in labour costs without risking widespread job losses and business closures.”

Call for VAT Reduction and Employer PRSI Cut

To further support the industry, the VFI is demanding a reduction in the VAT rate for hospitality to 9%, which would help maintain affordability for customers while easing operational costs. Additionally, the group is calling for a cut in employer’s PRSI, a move they believe is essential to safeguarding jobs and ensuring the survival of pubs.

Furthermore, the VFI is pushing for a decrease in the standard VAT rate from 23% to 21%, arguing that this would provide immediate relief by lowering the overall operational costs faced by pub owners.

Government Must Acknowledge the Crisis Facing the Industry

In his closing remarks, Crotty emphasized the urgency of the situation: “We need a clear commitment from the Government that they understand the scale of the crisis facing our industry and will take decisive action to prevent the collapse of our cherished pub culture.”

As the pub trade faces an uncertain future, the VFI’s plea underscores the need for swift and substantial action to prevent further closures and preserve Ireland’s pub culture, which plays a vital role in local communities. With the Budget 2025 fast approaching, all eyes are on the Government to see if it will take the necessary steps to support this struggling sector.