On-trade

Limerick publicans appeal to Minister for level playing pitch

As pubs continued to be squeezed by discount retailing in the multiples particularly in the run-up to Christmas Limerick publicans renewed their appealed to the Minister for Finance just before Christmas to take another look at their suggestion for a 15% ‘lid levy’ as part of any review of how tax on alcohol is being levied to ensure a fairer playing field.

Former VFI President David Hickey of South’s in Limerick’s Quinlan Street pointed out to Drinks Industry Ireland that turnover in pubs had dropped almost 40% since 2007 so that any pub with a high mortgage is likely to be in some type of trouble. He reckoned that 112 pubs in Limerick City and County have closed over the last seven years.

When David was Chairman of the Limerick vintners back in 1986, there were around 500 members in the City and County.  Now there are only 230 – about 100 of them in the city, he said.

“And with every pub that goes you are talking about three or four jobs, so hundreds of jobs in Limerick have been lost over the last number of years,” he told the Limerick Chronicle recently.

The VFI’s pre-Budget submission urged Minister Noonan to consider restructuring alcohol tax to allow pubs compete on a level playing field with major retailers and multiples. The vintners’ ‘lid levy’ introducing a 15% tax on all unopened alcohol products sold in the off-trade would have brought in €240 million for the Exchequer, he claimed, helping protect 50,000 jobs in the on-trade and helping counteract cheap alcohol sales in the supermarkets.

However the Budget excise increase combined with price increases from major brewers to lead to price increases of 20 cent.
On Limerick’s Live 95FM recently, VFI NEC member Jerry O’Dea pointed out that for every €1 spent on alcohol in pubs, the Exchequer took 52 cent in excise, VAT and other taxes.

“Excise tax is a very crude instrument and there’s the law of diminishing returns coming into play when the volume of sales goes down, the excise collected goes down too,” pointed out the Mulgrave Street publican.

Councillor James Collins, proprietor of Collins’ in Dooradoyle, also pointed out on the programme by that while restaurants had benefited from a reduced VAT rate, in contrast pubs had been hit by the excise hike and an increase in prices from suppliers.
“With our overheads, we wouldn’t be able to absorb that cost of 20 cent on each pint without wiping out our margin completely,” he explained.

 

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