Both the Vintners Federation of Ireland and the Licensed Vintners Association had been in contact with the Minister for finance Paschal Donohoe and Minister for State at the Department of Housing, Planning and Local Government John Paul Phelan on the issue.
It seemed clear that a proposal to defer rates demands to 31st May was not going to be a solution to businesses unable to generate any income whatsoever since the 15th March closures.
As LVA Chief Executive Donall O’Keeffe pointed out, “Accumulation of a rates bill where our turnover is zero is unfair and damages our prospects for recovery when we reopen”.
However in a letter to both vintners’ organisations Minister for State John Paul Phelan explained, “There’s a lot more detail to be worked out….over the coming weeks but I can assure you that the government has no intention of pursuing commercial rates to be paid for the period Pubs have been asked to close on public health grounds”.
Commercial rates are one of the biggest outgoings for most publicans, so this news will be a huge relief to publicans across the country.
In welcoming the news VFI Chief Executive Padraig Cribben pointed out that pubs had already been closed for almost five weeks now.
“Commercial rates are a significant annual expense so this decision will help ease the pressure on publicans,” he stated, “This is a good start but publicans will need government to introduce a suite of business supports if the sector is to remain viable. Our members understand that public health is the number one priority but charting a path out of the crisis is now required.
“Serious consideration will have to be given to outstanding VAT and PRSI commitments as there will need to be a level of debt forgiveness if we are to have any hope of rebooting the hospitality sector.
“A grant system for small businesses to aid liquidity is also essential. Once pubs reopen our members will need working capital, which traditionally they might have borrowed from banks at a commercial rate. In the ‘new normal’ we’re calling on government to establish a mechanism to allow ECB funds, which are borrowed at zero percent interest, be passed on to SME customers at the same low rate.
“We will continue talking with government over the coming weeks, but at this stage it’s clear that new thinking will be required if the hospitality sector is to survive a prolonged shutdown.”