Vintners seek “new reality” support from banks, insurance
The closure of nearly 7,500 pubs across the country for the next two weeks is likely to cost the industry over €100 million and is likely to have extensive repercussions post-Covid-19.
The Association seeks support from banks and insurers to help publicans keep their business afloat during a period when they will have zero turnover.
“Pubs across the country closed over the weekend, which was the correct decision to make putting public health first in light of the critical situation we all are facing,” commented LVA Chief Executive Donall O’Keeffe, “Now that decision has been made it also needs to be recognised by the banks and insurers that these extraordinary circumstances are going to have a massive impact on these local businesses. There will be no money coming into pubs for the duration of this period of closure.
“We will be pressing them to bring forward comprehensive support measures which take the new reality into account.
“There’s an onus on the banks and the insurers to do their part in saving this industry so that most pubs will be able to reopen. Their support will go a long way in assisting pubs to get back to trading when this crisis eventually passes, providing extensive employment and serving their customers across the country,” he concluded.
The Government and the vintners came to agreement on the nationwide closure as an essential public health measure, particularly following reports of reckless behaviour by customers in certain pubs on Saturday night.
Closure costs
The closure of nearly 7,500 pubs across the country for the next two weeks is likely to cost the industry over €100 million and is likely to have extensive repercussions post-Covid-19 with the LVA Chief Executive admitting earlier that, “I think we have seen some businesses in Ireland that will sell their last drink tonight and will never reopen again”.
Indeed these costs could grow much higher if the licensed trade cannot open on March 29th.
The LVA’s call to banks reflects an industry-wide call seeking a moratorium on loans from banks coupled with a State moratorium on employers’ social welfare payments, commercial and water rates
As 50,000 bar workers found themselves without work this morning as a result of last night’s closure of pubs across the country the Department of Employment And Social Protection has agreed temporary relief payments until March 29th to those laid-off – both full-time and part-time staff.
While this period may be extended the payment is for a maximum of €203 per employee.
Part-time employees will receive the full payment of their average weekly wage up to the €203 maximum as for full-time employees.
According to the Department, the expectation is that “employers match full-time employees wages to their normal weekly wage”.
Social Protection and Employment Affairs Minister Regina Doherty has urged employers to continue to pay their staff where possible.
“Where employers, who have to cease trading because of the impact of social distancing and continue to pay workers, they will be able to claim refunds from the Department of Employment Affairs and Social Protection,” she stated, “A temporary refund scheme is being established for this purpose.”
Period of prolonged uncertainty
The pubs will therefore be closed tomorrow for one of the trade’s busiest days of the year, St Patrick’s Day, with losses estimated at up to €70 million.
“We need to work together as a society to combat the coronavirus and if the situation in Italy is replicated here, difficult decisions will have to be made over the coming weeks,” commented VFI Chief Executive Padraig Cribben, “We’re now entering a period of prolonged uncertainty which will have profound consequences for the hospitality sector. The government has announced a support package for businesses that, while welcome, requires urgent clarity.
“Pubs can’t recoup a lost week or month’s trading. While a €200 million liquidity fund sounds impressive what does it mean for the small business owner?
“The Minister for Finance Paschal Donohoe has stated he’s ‘aware’ of what the hospitality sector is facing over the coming weeks. The VFI is urging him to announce a package of measures that will instil confidence in the sector ahead of this unprecedented challenge. A suspension of VAT payments, a reduction in the hospitality VAT rate and deferment of commercial rates for the remainder of 2020 are all options that should be examined,” he concluded.
Last Saturday Irish Hotels Federation President Elaina Fitzgerald Kane castigated the Department of Finance’s offer to “waive interest” on late revenue payments.
“The Department of Finance’s grossly inadequate response to the immediate and unprecedented challenges being faced by tourism businesses due to Covid-19 is reckless and risks wiping out a major component of the economy,” she stated, “By only offering to waive interest on late revenue payments temporarily the Government is threatening tens of thousands of jobs and the ability of many tourism businesses and their suppliers to survive this crisis. Our members are experiencing alarming levels of cancellations which are having a sudden and catastrophic impact on cashflow. This is affecting their ability to pay their employees, first and foremost, with lay-offs and short-time now becoming a reality.
“The impact will be devastating for much of the country considering the spread of tourism jobs, some 70% of which are outside of Dublin,” she continued, “For rural hotels in particular, the consequences are dire given the vital social and economic contribution they make to their local communities.”
The IHF has called on An Taoiseach Leo Varadkar and Minister for Finance Paschal Donohoe to intervene and ensure the implementation of the measures sought by the Minister for Transport, Tourism and Sport Shane Ross and his colleague Brendan Griffin as a matter of urgency.
“The Department of Transport, Tourism and Sport with Ministers Shane Ross and Brendan Griffin have recognised the deep crisis facing the tourism, hospitality and leisure sectors and sought Government agreement for urgent assistance for businesses that would have eased cashflow pressures. The Government must safeguard this essential indigenous industry that employs over 260,000 across every town and county, accounting for one in every 10 jobs and contributing over €9.2 billion in revenue to the economy.”
