2,000 pub jobs “in jeopardy” in next 12 months

“Minister Noonan’s crude and blunt excise hike last year was a surprise in terms of the size of the increase and was a massive disappointment” – VFI President Gerry Rafter.

The VFI has again called on the Government to protect the 40,000 jobs associated with the labour-intensive on-trade.

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The Federation called for two basic measures in particular:
 
·         Reduce excise on alcohol
·         Maintain the 9% VAT rate for the hospitality sector
 
VFI President Gerry Rafter called on the Minister not to increase excise and to consider lowering it. Ireland already has one of the highest levels of excise in the EU with current government take on excise and VAT on alcohol at €2 billion.
 
“Since 2009 over 6,000 jobs have been lost in the industry,” he stated, “We estimate that 2,000 jobs are in jeopardy in the next 12 months. Most of our members are family-run business in towns and rural parts of Ireland, often where there is little other employment. These jobs need protecting. There’s an obvious two-speed economy in this country and consumer confidence in many places is on the floor.
 
“A further increase in excise will only serve to widen the gap between the on-trade and off-trade, encouraging the abuse and misuse of cheap alcohol being sold by supermarkets that sell alcohol as a loss-leader. It will also make Ireland more expensive for tourists at a time when we are supposed to be trying to attract greater numbers.”
 
He continued, “Minister Noonan’s crude and blunt excise hike last year was a surprise in terms of the size of the increase and was a massive disappointment and proved catastrophic for many pubs. This government regularly claims that job creation is the number one goal. Budget 2014 is a great opportunity to practice what they preach. It’s clear that a lower excise rate will give publicans some relief and breathing space”.
 
The VFI also strongly favours retaining the 9% VAT rate which exists for a range of services connected to the hospitality and tourism sectors.  Food has become increasingly important to the pub trade and the 9% VAT rate has helped ensure competitiveness in this area.
 
A return to the previous 13.5% rate would make it difficult to continue offering food at the current prices.

“The pub is a major tourist attraction and it will be extremely difficult to provide value if prices keep increasing,” he warned, “Increasing the VAT rate for the hospitality sector and increasing excise will only serve to do two things. These measures will put pubs out of business, causing more job losses and make Ireland less attractive to tourists.”

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