Mr. Padraig Cribben:

I and my colleague, Mr. McGann, welcome and appreciate the opportunity to address the committee. First, we wish to extend our condolences to the families and friends of those who have died as a result of this pandemic. We hope those sick or in hospital as a result of the virus have a speedy recovery. We offer a very special thanks to the healthcare and front-line workers who have continued to provide essential and valuable services in recent months. They have made all our lives safer and more bearable.

Although public health is rightfully our foremost concern, the pandemic has had a considerable impact on many businesses, not least the pub trade. Our pubs are unique and provide an experience which is unmatched in any other country. That is why visiting our pubs is regarded as an essential aspect of Ireland’s tourism offering. Pubs are also an integral part of the fabric of many communities, acting as a meeting place, a social hub and an outlet in areas with limited facilities.

The pub sector makes a significant contribution to the Irish economy and the Exchequer. Pubs employ 50,000 people directly and are responsible for several thousand additional indirect jobs. These jobs are spread throughout every part of the country. The sector is made up of a multiplicity of small family-owned and run businesses. There are slightly more than 7,100 pub licences in the country. Of these businesses, 78% have an annual turnover of less than €390,000 from alcohol sales. Fewer than 6% of them are in the top licence band, that is, having sales in excess of €1.27 million per annum.

Pubs have played their part during this crisis. Our industry was the first sector to close on 15 March, putting public health before our economic and commercial interests. We fully recognise this was the responsible course of action and it was strongly supported by the VFI. However, it should be acknowledged that this period has been difficult for pubs. Turnover in the industry immediately dropped to zero. Tens of thousands of people lost their jobs in the space of a single day and livelihoods disappeared in an instant. Some of them may never return.

Pubs face a very uncertain future. It is certain that public health guidelines will restrict business in our industry for some time to come and that pubs will be among the last sectors of the economy to fully reopen. We have no indication as to when normal trading conditions will return. It has recently been suggested that that may not happen until a vaccine or treatment for Covid-19 has been found. Very few sectors of the economy have been hit as hard as the pub sector, and none will have its trade limited for such a long time.

Our sector has always been resilient. It adapts, is innovative and brings an entrepreneurial guile to whatever trading environment it faces. Whatever the post-Covid-19 new normal looks like, we have no doubt that Irish pubs will meet challenges head on, find new ways to appeal to their customers and maintain the place of the pub in Irish society. When pubs are in a position to trade, they will reopen quickly and efficiently. Our members are ready to re-employ tens of thousands of people across the country and to return to generating significant and much-needed revenue for the Exchequer. However, we must first survive the crisis.

To do that the pub sector will need Government support. We know this is a difficult time for the State and the economy. However, at this time of crisis we are asking the Government to invest in protecting the viability of the pub industry. We know this investment will pay off, providing a return on investment of multiple times what is being asked and one that will make a difference to employment, commerce, Exchequer revenues and community life throughout the country.

Never before has the pub sector needed the support of the Government as it does now. In summary, there are four key areas of support needed as follows: VAT on alcohol sold in the on-trade; extension of the temporary work subsidy scheme; extension of current assistance with commercial rates; and a reduction in excise paid on alcohol. Specifically, VAT on alcohol sold for on-trade for consumption is an incentive for the on-trade to reopen and relief is sought in this area. We have collaborated with our colleagues in Dublin from the Licensed Vintners Association and Drinks Ireland, representing the drinks industry, to come together looking for relief in this area. Such a measure would generate immediate and tangible support to these businesses, allowing them to reopen viably and maintain jobs.

Until now, it was understood that such a move was disallowed under EU VAT directives. However, we have now established that this measure is possible given the European Commission Directive 2009/47/EC, which amends the original directive from 2006 with regard to VAT. The amended directive makes it possible to extend and apply a lower VAT rate on on-trade alcohol in Ireland and across the EU. Such a measure would be in step with other EU countries, which are using temporary reductions in VAT to provide immediate support to their drinks, hospitality and tourism sectors in the midst of this pandemic. In Spain and Italy, VAT in the on-trade has long been set at the hospitality rate. In Cyprus, the VAT rate on services has been reduced from 9% to 5% from June to January 2021 and this applies to alcohol sold in the on-trade. In the UK, a lower VAT rate for the tourism sector, including pubs, restaurants and hotels, is an option currently being considered. We are specifically asking that the VAT on alcohol sold for on-trade consumption be reduced from its current rate to 9% until 31 December this year.