SLASHING excise duty and VAT for the hospitality sector in Budget 2025 is the only way to prevent a tsunami of closures, it’s been claimed.
Reps for hard-hit boozers have said a reduction in business taxes is essential to help struggling spots stay afloat, declaring: “The pub trade in Ireland is at a breaking point.”
The Vintners Federation of Ireland (VFI) has called on the Government to “urgently address” challenges facing the pub industry.
They warn that many “well-run pubs” across Ireland risk closures due to escalating costs.
Chief Executive of the VFI, Pat Crotty said: “The pub trade in Ireland is at a breaking point. Without meaningful government intervention, we will see a wave of closures that will impact communities across the country.
“Publicans need long-term support, not just one-off schemes, to navigate these unprecedented challenges.”
They have made a number of recommendations for Budget 2025 to aid the rising costs of running a pub.
The VFI have called for a pause in the move towards a Living Wage, stating that they “support fair wages to employees” but ask for it to be paused until a “full impact study” into the is trade is conducted.
They said: “While the VFI supports fair wages for all employees, the move to a Living Wage must be paused until a full impact assessment on the pub trade is conducted.
“The current economic climate does not allow for such a significant increase in labour costs without risking widespread job losses and business closures.”
They have also asked for a reduction of 7.5 per cent in excise duty and a lowering of the hospitality VAT rate to 9 per cent.
They explained: “This will provide immediate relief to publicans, allowing them to reduce prices and increase margins, which are currently squeezed to unsustainable levels.
“For pubs serving food, a reduced VAT rate is essential to maintaining affordability for customers while enabling publicans to remain competitive.”
The VFI are also demanding a reduction in employers PRSI and a reduction of High VAT Rate from 23 per cent to 21 per cent.
Budget 2025 demands
To ensure the survival of Ireland’s pubs, the VFI is demanding the following measures be introduced in the upcoming Budget:
- Reduction of 7.5 per cent in Excise Duty
- Lower Hospitality VAT Rate to 9 per cent
- Reduction in Employer’s PRSI
- Pause the move to a Living Wage
- Reduce High VAT Rate from 23 per cent to 21 per cent
In an effort to highlight soaring costs, the VFI has started a campaign to explain where the money goes after a pint is purchased.
The VFI CEO explained: “The Government makes €1.77 from every pint sold.
“The drink supplier receives over €1.50 while staff costs account for €1.41.
“By the time overheads like insurance and TV sports subscriptions are paid the typical publican is left with just 17c.
Profit problems
“The average publican doesn’t come close to selling enough pints to make it a profitable business.”
Pat added: “The Government must recognise that pubs are more than just businesses – they are the heart of communities, providing social hubs and supporting local economies.
“We need a clear commitment from the Government that they understand the scale of the crisis facing our industry and will take decisive action to prevent the collapse of our cherished pub culture.”
