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Slash tax by 60 cents a pint, publicans' chief to tell Covid-19 committee

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Support request: VFI chief executive Padraig Cribben

Support request: VFI chief executive Padraig Cribben

Support request: VFI chief executive Padraig Cribben

The Government should slash Vat and excise on alcohol by 60 cents a pint to help pubs survive, TDs will be told today.

"Never before has the pub sector needed the support of the Government as we do now," says Vintners Federation of Ireland (VFI) chief executive Padraig Cribben in his prepared remarks to the Special Committee on Covid-19 Response.

The VFI, which represents 4,000 pubs nationally, says more than three-quarters of pubs have annual sales below €390,000 even in good times. They will need State relief to strengthen their cash flow.

The VFI wants the new Dáil to slash pub costs through the end of the year by cutting Vat on alcoholic beverages from 23pc to 9pc and by reducing excise by 15pc. It also wants rates holidays and State pay subsidies to be extended until social distancing in pubs can end - potentially not until 2021.

Such tax cuts, if approved, would remove around 60 cents in Vat and excise from every pint sold.

The most recent 'Beer Market Report' by the Irish Brewers' Association put the average price of a pint of lager at €4.94 and stout at €4.55.

This means the average Vat and excise added to a pint of lager stands at 86 cents and 55 cents respectively, or €1.41 total. Vat and excise would fall under the VFI's proposals to 34 cents and 47 cents, or 81 cent a pint. Average tax reductions on stout would be a few cents less.

Reduced Vat, Mr Cribben says in his opening statement, "would generate immediate and tangible support to [pubs], allowing them to reopen viably and maintain jobs".

He says a 15pc cut in excise still would leave Ireland with the third-highest rate in Europe, behind only Sweden and Finland.

Extending the payroll subsidy would allow pubs to avoid payroll costs that typically represent around 20pc of turnover in drinks-only pubs and more than 30pc in pubs with kitchens and restaurants.

He says pubs don't expect to return to normal trading conditions "until such a time as a vaccine or treatment for Covid-19 has been found. Very few sectors of the economy will have been hit as hard. None will have their trade limited for so long."

The Covid-19 committee also expects to hear from Tim Fenn, chief executive of the Irish Hotels Federation; Adrian Cummins, chief of the Restaurants Association of Ireland; and John Moran, chairman of SME (small and medium-sized enterprises) Recovery Ireland.

Irish Independent