Pubs criticise €16m support and call for cut in excise tax

The drinks industry has said the Government’s €16 million support package for pubs shows “short-term thinking” and has called for a reduction in excise tax.

Tánaiste Leo Varadkar said on Friday that a €16 million package was being made available for pubs prohibited from reopening this week. There will be a 40 per cent increase on the restart grant for businesses in the pub trade, he added.

Minister for Public Expenditure Michael McGrath said Cabinet had also agreed to waive all licence fees for closed pubs.

However, a spokeswoman for Drinks Industry Group of Ireland (DIGI), the umbrella organisation that represents Ireland’s drinks and hospitality industry, said the measures fall well short of what is required to rescue the pub trade.

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“While some support is better than none, the Government’s new package shows short-term thinking and a failure to grasp the magnitude of the situation that publicans are facing,” she said.

“Since the lockdown, almost half of publicans have taken on debt of €16,000, one in five as much as €30,000, much of it to invest in protective equipment and refurbishments in preparation for reopening. The package therefore barely scratches the surface of what is required.”

The spokeswoman said the lack of certainty in relation to when pubs can reopen was adding to the problem.

“Pubs in Ireland have been closed for almost six months, significantly longer than any other EU country,” she said. “There has still been no explanation from the Government as to why Ireland is a special case.

“Furthermore, the Government has not provided any certainty or even a rough timeline for pub reopenings. This is little comfort for the thousands of business owners who face the real prospect of permanent closure, and soon.

“Lockdown until 2021 will cause irretrievable losses in jobs, reduce prospects in rural communities, weaken our tourism product, and permanently damage the character and culture of the country.”

She added that a reduction in excise tax in the next budget would help matters.

“If the Government wants to make impactful decisions that will enable the industry to not only reopen but to recover, then longer-term strategies need to be put in place that reassess some of the wider constraints that exist across the sector, such as excise tax,” she said.

“Despite being one of the most severely impacted industries in the state as a result of the Covid-19 pandemic, the drinks and hospitality sector remains subject to the second highest excise tax in Europe.

“A reduction in excise tax should be among the core considerations for Government as we look towards Budget 2021.

“Without a reduction, businesses will reopen in debt at reduced capacity with the second highest rate of excise in the EU. This will put them on an immediate back foot and threaten more permanent closures.”