On-trade

Government’s €16m Support Package – “crumbs”

The new measures announced on Friday the 28th of August by the Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar, the Minister for Finance Paschal Donohoe, the Minister for Public Expenditure Michael McGrath and Minister for Justice Helen McEntee have been described as a “paltry gesture” and “woefully inadequate” by the Licensed Vintners Association and the Vintners Federation of Ireland.
"The Government is allowing thousands of pubs wither on the vine” – Padraig Cribben.

“The Government is allowing thousands of pubs wither on the vine” – Padraig Cribben.

The Government announced a “further €16m support package to help pubs, bars and nightclubs, recognising the economic impact of Covid-19 on their businesses and to assist planning and adaptation for their re-opening” last Friday the 28th of August.

The new measures comprise:

  • a Restart Grant Plus 40% Top Up. Those businesses remaining closed and planning their re-opening. These can now receive a minimum of €5,600 and a maximum of €35,000 under the Restart Grant Plus. This can be used to help additional expense and adaptations associated with re-opening when the time comes. “The Restart Grant Plus gives grants to businesses to help them adapt, re-open their business and get back to work,” stated the Government, “It provides a minimum payment of €4,000 and a maximum payment of €25,000 based on the rates bill of the enterprise in 2019.  To qualify for the scheme, enterprises must have 250 employees or less or turnover of less than €100,000 per employee as well as reduced turnover by 25% as a result of Covid-19.  Applications can be made through Local Authorities”

 

  • the waiver of court fees and associated excise and stamp duties relating to the renewal of pub and other liquor licences in 2020 (having a value of €1.2 million). The relevant court fees, excise duty and stamp duty are as follows:
    • Court Certificate for renewal of pub licence (where required) – €150
    • Public Dancing Licence – €490 (€335 court fee plus €155 excise duty)
    • Public Music and Singing licence – €150
    • renewal of Registration of registered club – €655 (€150 court fee plus €505 stamp duty)
    • Restaurant Certificate – €150

 

  •  waiver of excise duty on on-trade liquor licences on renewal in 2020. Having a value of €8.2 million, the rate of excise duty on renewal of an on-trade licence is based on the annual turnover of the premises based on alcohol sales only.

These measures are in addition to the existing Restart Grant Plus, Tourism Adaptation Fund, the wage subsidy scheme, commercial rates waiver, liquidity supports and tax measures (such as warehousing of tax debt and reduction in VAT), stated the Government.

“It’s been a really difficult few months for pub owners,” said the Tánaiste, “Our publicans are making a massive sacrifice to protect their communities and the government is determined to help.

“This package, in addition to the grants and subsidies already available, will help pub owners with expenses to do with getting ready for re-opening. The increase in the Restart Grant Plus means pubs that are remaining closed will receive a minimum of €5,600. We want to make sure that our pubs are in a position to re-open as soon as it is safe to do so.”

The Government is acutely aware of the unique circumstances which pub owners find themselves in as a result of Covid-19, said Minister for Finance Paschal Donohoe, “The package of measures announced today builds on the supports already available and will help to address some of the unique challenges faced by this sector.

“The waiving of court fees, excise and stamp duties in relation to licence renewals is a necessary step in supporting these businesses.”

Minister for Public Expenditure and Reform Michael McGrath said, “The past few months have undoubtedly been really difficult for publicans and their staff, particularly for those who have been unable to trade for public health reasons. Pubs are an important part of the social fabric of our country and the measures announced today are another support to help them come through this very challenging time and be able to re-open when the time is right.”

Minister for Justice Helen McEntee added, “I welcome the financial support measures adopted by Government for pub and restaurant businesses, many of whom have been hardest and longest hit over the last few months.”

“Importantly and especially in light of the enforcement legislation I brought to Cabinet today, it preserves the basis for An Garda Siochana to object to a renewal of a licence where necessary, while at the same time ensuring that the cost to a pub or restaurant owner of renewing their licence is significantly reduced.”

 

Industry reaction

However the measures announced were described as “crumbs” and “woefully inadequate” by the Licensed Vintners Association and the Vintners Federation of Ireland who pointed out that pubs that are still closed will receive only the same level of restart grant as provided to businesses in Kildare, some of whom remained open. Kildare businesses received a 40% grant for four weeks closure but wet pubs, who will have been kept closed for a minimum of six months, will receive the same 40% grant, they point out.

“This is a paltry gesture which shows how little regard this Government has for the troubles of the pub industry,” said LVA Chief Executive Donall O’Keeffe, “We asked for ‘Support Not Sympathy’ and the Government has given us crumbs. This is the third time the re-opening of the pubs has been delayed and they’ve had weeks to put a package together. We’d been calling for a plan to support the pub sector since mid-July and this is all the Government managed to put together. It is disappointing in the extreme.”

Meanwhile VFI Chief Executive Padraig Cribben described the “so-called” support package for publicans who are closed almost six months as “woefully inadequate”, adding, “Our members are facing into an Autumn of uncertainty with no guidance from Government about how and when they will be allowed re-open. In the circumstances a weekly grant payment was the absolute minimum publicans expected.

“Publicans are now in complete despair. They can’t see any light at the end of the tunnel and these supports will do nothing to ease their fears for the future. The Government is allowing thousands of pubs wither on the vine and the damage being done to local communities across the country is incalculable,” he concluded.

“While some support is better than none, the Government’s new package shows short-term thinking and a failure to grasp the magnitude of the situation that publicans are facing,” commented the Drinks Industry Group of Ireland, “Since the lockdown, almost half of publicans have taken on debt of €16,000, one in five as much as €30,000, much of it to invest in Protective Equipment and refurbishments in preparation for re-opening. The package therefore barely scratches the surface of what is required.

“Pubs in Ireland have been closed for almost six months, significantly longer than any other EU country. There has still been no explanation from the Government as to why Ireland is a special case.

“Furthermore, the Government have not provided any certainty or even a rough timeline for pub re-openings. This is little comfort for the thousands of business owners who face the real prospect of permanent closure – and soon.

“Lockdown until 2021 will cause irretrievable losses in jobs, reduce prospects in rural communities, weaken our tourism product and permanently damage the character and culture of the country.

“If the Government wants to make impactful decisions that will enable the industry to not only re-open but to recover, then longer-term strategies need to be put in place that reassess some of the wider constraints that exist across the sector such as excise tax.

“Despite being one of the most severely impacted industries in the state as a result of the Covid-19 pandemic, the drinks and hospitality sector remains subject to the second-highest excise tax in Europe. A reduction in excise tax should be among the core considerations for Government as we look towards Budget 2021.

“Without a reduction, businesses will re-open in debt at reduced capacity with the second-highest rate of excise in the EU. This will put them on an immediate backfoot and threaten more permanent closures.”

 

Overview of supports currently available to vintners (pubs/ bars/ nightclubs)

 

Support

 Pubs/Bars/Nightclubs

 

Wage Subsidy Scheme  

Weekly payment of up to 85% of net pay and from September a flat rate up to €203 per employee to assist with wage costs

 

PUP

Weekly payment of up to €350 with level based on previous income and tapered payment to March 2021

Commercial Rates Waiver

Commercial rates waived for a six-month period

Restart Grant Plus  

Minimum grant of €4k and maximum grant of €25k based on rates bill. Enhanced grants are available to businesses in Counties Offaly, Laois and Kildare

 Liquidity Supports

Variety of liquidity measures put in place

Tax Measures

Measures including warehousing of tax debt and reduction in headline VAT rate from 23% to 21%; Stay and Spend initiative

July Stimulus Measure

€10m for Tourism Adaptation Grant.

 

Sign up for Drinks Industry Ireland

Get a free weekly update on Drinks Industry trade news, direct to your inbox. Sign up now, it's Free