No-deal Brexit could see 10,000 jobs go in Irish tourism industry

Approximately 10,000 jobs could be lost in Ireland's tourism industry in the event of a no-deal Brexit, according to the Chair of the Drinks Industry Group of Ireland (DIGI).

Rosemary Garth explained that the tourism industry is driven by the country's drinks and hospitality sector which employs almost 8% (270,000 people) of the country in pubs, restaurants, hotels, breweries and distilleries. She added that most of the sector's employees live and work in rural Ireland.

Ms Garth said: "For business owners in our sector, there is a perfect storm brewing. UK tourism has dropped. The sterling and euro are almost at parity.

"Last year’s VAT hike has eaten into profit margins. A no-deal Brexit will further damage sterling and further reduce overseas visitor numbers. Even more significantly, it will encourage cross border shopping which is a major concern for this industry, diverting sales from Irish businesses to cheaper produce across the border which would severely impact this industry, as occurred in the past.

A disruption in agri-food will cause disruption in drinks production, leading to knock-on effects for drinks retailers and hospitality providers. Jobs will be lost and businesses will close, especially in rural areas.

Concern is linked to 2018's VAT hike, which has made Ireland's tourism VAT higher than 27 other EU countries. The Irish Tourism Industry Confederation (ITIC) estimates that the VAT increase in the last budget has led to an additional 466 million in tax for the industry.

“Obviously, the daily chaos in Westminster makes long-term planning for a no-deal Brexit immensely difficult. However, considering that the chance of the UK and the EU reaching a deal is now very small, the Irish Government must do everything in its power to lower or remove barriers that impede Irish businesses from operating at their maximum efficiency and productivity."

Ms Garth said the government needs to ensure Ireland's taxation policies are competitive and noted Ireland's excise tax on alcohol, which is the second highest in the European Union after Finland. According to a report commissioned by DIGI and authored by economist Anthony Foley, Ireland has the highest tax on wine, the second highest on beer, and third highest on spirits.

Ms Garth said DIGI are "asking the Minister for Finance to reduce excise tax on alcohol by 15% over a two-year period: first, with a reduction of 7.5% in Budget 2020, then with a further 7.5% reduction in Budget 2021.

“While a reduction won’t solve the drinks and hospitality sector’s problems overnight, it will give businesses much-needed breathing space and free up funds to survive a Brexit-induced downturn.”