VFI calls for MUP ahead of Election

As part of its Manifesto for the upcoming General Election, the Vintners Federation of Ireland has called for the immediate introduction of Minimum Unit Pricing along with a reduction in both excise duty and the hospitality VAT rate.

“On Saturday 8^th February, the country will go to the polls to decide the composition of the next Dáil,” stated VFI Chief Executive Padraig Cribben speaking at the launch of the Federation’s Manifesto recently, “As publicans, the election campaign is an opportunity to make our collective voice heard about the issues impacting our trade.

“As a Federation of almost 4,000 members we should not underestimate the power of each individual publican engaging with candidates about these issues. While numerous issues impact the pub sector, we’ve identified six areas are of key concern requiring immediate and measurable action.”

These are:

Introduction of Minimum Unit Pricing – Central Statistics Office figures show Irish people are spending more on alcohol for consumption at home. The CSO Household Budget Survey reveals the proportion of total alcohol expenditure spent on drinks consumed at home increased from over 41% in 2009-2010 to over 51% in 2015-2016. Publicans cannot compete with supermarkets on price – we need a level playing pitch.

At present supermarkets in some instances are selling a bottle of spirits for less than the cost of excise and VAT. These unfair practices need to end with the introduction of MUP as provided for in the Public Health Alcohol Act.

According to Padraig Cribben, “During Christmas, some outlets were selling two trays of lager for €35 (€17.50 per tray). The introduction of MUP would mean a tray of lager would cost €41”.

Insurance Reform – The cost of insurance and associated compensation pay-outs is forcing small businesses to close. We need politicians to take necessary steps to introduce dynamic insurance reform and cut unfair personal injury awards. The slow pace of sectoral reform continues to place publicans in an invidious position where publicans are arbitrarily informed that insurance will no longer be provided. Publicans who continue to receive cover can face 40% increases in their premiums. Fraud and exaggerated claims are a major issue with liberal compensation pay-outs the main driver of malicious claimants.

Promote rural transport initiatives – At present there’s no Government support for publicans who wish to transport customers to and from the pub. In the absence of a sustainable rural transport network, the lack of support for publicans is undermining the fabric of rural Ireland and contributing to a rise in mental health and isolation issues. The VFI is calling for Government to support transport schemes established by local communities that will benefit the wider community. Grants for insurance and maintenance costs would signify a serious government commitment to rural Ireland.

Reduce Excise Duty – Ireland now has the second-highest overall tax rate in Europe. We have the highest tax on wine, the second-highest on beer and the third highest on spirits. These taxes are a tax on both Irish consumers and tourists. The pub trade plays an integral part in the tourism business and a combination of high excise and other regulatory issues are now putting a lot of these outlets at risk. The VFI is calling for a reduction of 15% in excise (7.5% in 2021 and a further 7.5% in 2022). It should also be borne in mind that there were two recent excise increases which were part of the emergency response to the situation the country found itself in. Most of these emergency responses have now either been reversed or are in the process of being reversed and alcohol excise tax should be no different.

Padraig Cribben pointed out that the present rate of excise duty inhibits growth in the hospitality sector, leads to increased costs and harms our competitiveness with foreign tourist markets.

Reduce hospitality VAT rate – Last year’s VAT increase added €466 million as a cost to the Irish tourism and hospitality businesses while leading to closures and staff redundancies. Ireland now has the highest tourist VAT rate in the Eurozone. It’s critical that the 9% VAT rate is reintroduced to stimulate growth and protect jobs in the hospitality sector – the largest employer in Ireland. This level of VAT significantly impacts on the competitiveness of the sector and on the ability to sustain many rural businesses. In light of the challenges to the pub trade over the last decade, many have invested heavily in diversification with food  an integral part of this change. In many cases it has not been possible to pass on this VAT increase to the consumer and this has put many businesses under financial strain and indeed threatens their actual viability.

Last year’s VAT increase to 13.5% has led to closures and staff redundancies. It’s critical the 9% VAT rate is reintroduced to stimulate growth and protect jobs in the hospitality sector – the largest employer in Ireland.

Balanced regional development – Investment in the capital city has created a two-tier economy that favours Dublin. We need a coherent plan for sustainable regional economic development that will encourage population growth outside the main cities.

Padraig Cribben added, “The pub plays a vital role at the heart of local communities. It’s imperative candidates acknowledge this fact and voice their support for these local businesses.”