Covid battle can’t mean war on pubs, says Drinks Ireland

Call for Budget support for drinks industry and hospitality sector 

Drinks Ireland has been campaigning to protect the country's pubs from permanent closure.

The battle against Covid-19 continues in Ireland and around the world, and our industry is mindful of the work of the Government and others to help tackle the virus, while protecting the economy.

Ahead of Budget 2021, we are calling for serious consideration to be given to measures that can support the drinks industry, and the wider hospitality sector, which has been hit and hit hard.

As an industry, we are extremely concerned at the current approach of disproportionately targeting the hospitality sector, particularly pubs, in the fight against Covid-19. The re-closure of hospitality venues is emerging as a primary strategy to address the spread of the virus.

This is out of sync and way more restrictive than other EU countries. The lesson of other countries is that a different approach is possible and should be considered – an approach that protects our health but also enables the hospitality and experience economy to operate.

If the sector continues to be targeted, it will have dire consequences for jobs and the economy. The hospitality and broader experience sector are a key element of our economic and social life in Ireland. The sector contributes €4.5bn in wages, salaries, and employment taxes every year.

More than 330,000 people are either employed directly or supported directly by demand from the sector.

It is important to note that it is an industry that reaches well beyond those who are directly employed, and touches every city, town, village, and rural community, with a far-reaching supply chain. It encompasses everything from the rich provenance of our food in our restaurants, sophisticated hotels that operate to the highest international standards, world-class events, our pubs which are known and loved by national and international visitors alike, to unique experiences such as whiskey tasting in distilleries.

From the point of view of the drinks industry, suppliers are of course heavily reliant on a vibrant and active hospitality sector.

The closure has been made worse by the “stop and start” approach being taken, which gives the hospitality venues and its suppliers very little notice ahead of having to shut down, or ordered not to reopen, which has happened time and time again.

Greater engagement with the sector and sufficient advance notice must be given in the future for any further closures

Drinks suppliers have invested heavily in production ahead of each planned reopening, brewing beer and cider, delivering kegs, and cleaning lines. Each time these venues are closed, suppliers have been bearing the full expense, in collecting and disposing of unused kegs, as beer and cider, in particular, do not keep.

Of course, the impact of unused stock extends beyond just drink suppliers. Considering the wider food supply chain, it also includes fish, meat, fresh fruit and vegetables, and much more. Over €60m worth of stock has been written off by drinks and hospitality businesses, as a result of the Government’s ‘stop-start’ approach to reopening the sector so far.

Patricia Callan, Drinks Ireland director, says the sector can play a vital role in the economic recovery that will follow this pandemic.

Greater engagement with the sector and sufficient advance notice must be given in the future for any further closures. As this has happened on multiple occasions, targeted financial supports for the hospitality/supply sector to specifically compensate for the losses associated with perishable products are also required.

Looking at the budget, in particular, a safe and sustainable reopening will not be enough. Recovery of the drinks and hospitality industry will be a long process, and the  Government needs to think long term, with a support strategy and package of practical measures.

The Government must look at the current constraints that exist within the sector, including the excessively high tax rates that are imposed on the industry.

A 15% reduction in Ireland’s excise tax rate on alcohol, which is currently the second-highest in the EU, will support recovery in the wider drinks and hospitality sector. It will redirect money back to over 20,000 business owners in the sector, where it can be reinvested to support the trade as they operate in the Covid-19 environment with reduced capacity, reduced demand, and additional restrictions on how they operate.   The hospitality and experience sectors are regulated environments and have proven to be responsible players throughout the crisis. The sector, which is vital to the Irish economy, can play a crucial role in the economic recovery which will follow this pandemic, as it did during the recovery of the last economic crisis when it accounted for one in every seven jobs created.

But it needs to be supported by the Government now.

- Patricia Callan is director of industry representative group Drinks Ireland