Pubs have recovered from pandemic 'but 9% Vat rate still needed'

Pubs face fierce competition from all sides, says Vintners’ Federation of Ireland

Vintners’ Federation of Ireland president John Clendennen says keeping the reduced 9% Vat rate for hospitality businesses is still required for pubs to continue to appeal to tourists.

Most pubs outside the Dublin region have made a full recovery, with their sales matching or exceeding levels before the onset of the pandemic, but they still rely on keeping the reduced Vat hospitality rate of 9%, according to their trade body.           

The Vintners’ Federation of Ireland (VFI), which represents pub owners outside the capital, also said that most of its members were weathering the escalation in utility bills and insurance, and reported encouraging levels of confidence for the future of their businesses. 

Three-quarters of the pubs posted sales that were similar or more than the levels they generated before the pandemic, according to the survey.  

The latest retail sales figures from the Central Statistics Office appear to support the VFI survey. The figures for March show that overall bar sales in Dublin and the rest of the State rose 9.6% in volume terms from a year earlier. Sales were up by almost 18% in terms of value or in money terms, the CSO figures also show.      

However, VFI president John Clendennen said keeping the reduced 9% Vat rate for hospitality businesses is still required for pubs to continue to appeal to tourists. The Government needs to take further action to rein in insurance costs facing pubs, he said.         

'Huge battle'

“In 2020, it felt as if our world was coming to an end. Through an abundance of resilience, innovation, and diversity in product offering, we came through the crisis,” said Mr Clendennen, but reiterated that pubs face a “huge battle” in their battle against costs. 

After extensive lobbying from restaurants, hotels, and others in the hospitality industry, the Government decided to keep the lower rate for hospitality businesses pegged at 9% for several more months, although the tax measure is hugely expensive in terms of the tax foregone by the exchequer.  

Mr Clendennen said that pubs face fierce competition from all sides.

“Pubs are no longer simply competing with the bar down the road, but with everything from gym membership to television subscriptions, live events, and foreign holidays as people choose where to spend their hard-earned disposable income," he said.