VFI call for ‘pints’ tax rebate to save rural pubs
Pictured ahead of the Vintners’ Federation of Ireland (VFI) AGM in The Strand Hotel, Limerick today, are VFI president Michael O’Donovan (right) with Eamonn O’Rahilly and his wife, Audrey, from The Spotted Dog pub, Limerick City (Picture Conor McCabe Photography)
The Vintners Federation of Ireland (VFI) is calling for a 40% rebate on the excise charged to draught products sold in pubs. The VFI says the rebate would help protect rural pubs that play a vital social role in their local communities, while also preserving employment in a sector struggling with soaring costs.
Ireland has the second-highest excise rate on alcohol in Europe, with taxes accounting for nearly 30% of the price of a pint. According to the VFI, the current tax burden is unsustainable and is placing severe financial pressure on publicans, particularly in rural areas.
VFI President Michael O’Donovan with Eamonn O’Rahilly from The Spotted Dog pub, Limerick City. Picture Conor McCabe Photography.
“Publicans are not asking for a handout – we are asking for fairness,” says VFI CEO Pat Crotty. “A 40% rebate on the excise charged on draught products is a practical, targeted support that would make a real difference for small pubs across Ireland. These are businesses at the heart of their communities, providing employment, social connection and play a key role in our tourism offering.”
“We welcome the Government’s commitment to support SMEs in the Programme for Government, which acknowledges the increased cost pressures on the hospitality sector. However, it is vital that any measures introduced benefit all pubs – not just those serving food,” says Crotty.
The VFI argues that while the proposed VAT reduction for hospitality is welcome, it will only benefit pubs that serve food, leaving traditional pubs without support. The draught rebate, in contrast, would ensure that all pubs, regardless of size or location, benefit.
“Rural pubs are facing an existential crisis,” adds Crotty. “We have seen hundreds of pubs close their doors in recent years. If this trend continues, we will lose a vital part of Irish culture and community life. A draught rebate is a simple, fair, and targeted measure that would provide immediate relief. We estimate the rebate would cost €73m annually, a small fraction of the VAT proposal.”
The VFI is urging the Government to include the draught rebate in the upcoming Budget as a critical measure to preserve Ireland’s pub culture and sustain rural communities.
The excise rebate scheme is based on a report written by Anthony Foley from DCU Business School. The rebate proposal works when a pub provides evidence from suppliers that it purchased a certain number of tax-compliant kegs of qualifying beverage. The rebate of 40% is calculated by Revenue, up to a maximum of €20k. The appropriate rebate is credited to the VAT due in each VAT period of the following year.
For example, a 50-litre keg of Guinness contains 88 pints and generates €47.36 in excise per keg. A 40% rebate would be €18.94 per keg. To receive the full rebate of €20k, a public house would need to sell 1,056 kegs annually or 20.3 kegs weekly. Most rural pubs would not sell this volume of kegs. The annual excise rebate would be capped at €20k per licensed premises.
The rebate applies only to draught alcohol products with a maximum ABV of 5%. In effect, this means it is confined to beer/cider. The restriction of the rebate to draught products ensures the measure is focused on public houses and other bars.
