Thomas Lyons 
Irish Pubs Outside Dublin Region Recover from Pandemic, But Still Need Reduced Vat Rate
According to the Vintners’ Federation of Ireland (VFI), most pubs outside Dublin have made a full recovery from the pandemic, with their sales matching or exceeding pre-pandemic levels. However, they still rely on the reduced Vat hospitality rate of 9%. The VFI represents pub owners outside the capital, and most of its members are weathering the escalation in utility bills and insurance. They also reported encouraging levels of confidence for the future of their businesses.
In a survey conducted by the VFI, three-quarters of the pubs posted sales that were similar or more than the levels they generated before the pandemic. The latest retail sales figures from the Central Statistics Office also 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.
Despite the recovery, VFI President John Clendennen said that keeping the reduced 9% Vat rate for hospitality businesses is still required for pubs to continue to appeal to tourists. He also urged the government to take further action to rein in insurance costs facing pubs. “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.
The pandemic has had a significant impact on the hospitality industry in Ireland, with many businesses struggling to stay afloat. The government’s decision to reduce the Vat rate for hospitality businesses to 9% was a lifeline for many pubs and restaurants. However, the reduced rate is set to expire in September, and the government has not yet indicated whether it will be extended.
The VFI is urging the government to extend the reduced Vat rate for hospitality businesses until at least the end of the year. The organization argues that the reduced rate is necessary to help pubs and restaurants recover from the pandemic and attract tourists. The VFI is also calling on the government to take action to reduce insurance costs facing pubs, which have soared in recent years.
In conclusion, while Irish pubs outside Dublin have made a full recovery from the pandemic, they still face significant challenges. The reduced Vat rate for hospitality businesses is essential for their survival, and the government must take further action to reduce insurance costs facing pubs. The VFI is calling on the government to extend the reduced Vat rate until the end of the year to help pubs and restaurants recover from the pandemic and attract tourists.
