Calls for beer tax cut as rural pubs struggle to survive
The rebate would help protect rural pubs, which 'play a vital social role in their local communities, while also preserving employment in a sector struggling with soaring costs', the Vintners Federation of Ireland says.
Ireland has the second-highest excise rate on alcohol in the EU, just behind Finland, with taxes accounting for nearly 30% of the price of a pint. Pic: Ross Mahon/Shutterstock
The average price of a pint of stout nationwide is now €6.06, while lager is €6.48 and cider is €6.58. But the tax burden is unsustainable and is placing severe financial pressure on publicans, especially in rural areas, according to the VFI, which represents publicans outside Dublin.
VFI chief executive Pat Crotty said: 'Publicans are not asking for a handout – we are asking for fairness. A 40% rebate on the excise charged on draught products is a practical, targeted support that would make a real difference for small pubs across Ireland.
'These are businesses at the heart of their communities, providing employment, social connection and play a key role in our tourism offering. VFI chief executive Pat Crotty. Pic: Conor McCabe Photography.
'We welcome the Government's commitment to support SMEs in the Programme for Government, which acknowledges the increased cost pressures on the hospitality sector. However, it is vital that any measures introduced benefit all pubs, not just those serving food.'
The rebate would not mean cheaper bar prices but would go to the bottom line for publicans who say their businesses are struggling. The VFI argues that while the proposed VAT reduction for hospitality is welcome, it will benefit only pubs serving food, leaving traditional pubs without support.
The draught beer rebate, in contrast, would ensure that all pubs, regardless of size or location, would benefit. Pic: Getty Images
Mr Crotty added: 'Rural pubs are facing an existential crisis. We have seen hundreds of pubs close their doors in recent years. 'If this trend continues, we will lose a vital part of Irish culture and community life.
'A draught rebate is a simple, fair and targeted measure that would provide immediate relief. We estimate the rebate would cost €73million annually, a small fraction of the VAT proposal.'
The VFI also urged the Government to include the draught rebate in the next budget as a critical measure to preserve pub culture and sustain rural communities.
The cut is aimed not at lowering beer prices but increasing publicans' income. A VFI spokesman explained: 'The cost of running a pub has just gone through the roof. The minimum wage has gone up 36% in the last four budgets to €13.50 an hour.
'The business model is under huge stress. Nobody begrudges people earning the minimum wage what's due to them. But the Government needs to recognise if we want a viable rural pub trade… it's going to need some intervention at the taxation level.'
The excise rate is €22.55 per 100 litres percent of alcohol in the beer, which for most beers is around 50c a pint. A 40% cut would bring that amount down to around 30c.
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