VAT increases could ‘ruin’ pub industry in Limerick

Alan Owens

Reporter:

Alan Owens

CONSUMERS have seen the price of a pint increase by ten cent in some pubs in Limerick, while other publicans have yet to pass on the recent increase in VAT.

CONSUMERS have seen the price of a pint increase by ten cent in some pubs in Limerick, while other publicans have yet to pass on the recent increase in VAT.

But most pubs are expected to pass on the 2% increase in the coming weeks if they have not already done so - with the increase likely to “decimate” an already declining industry, according to the Vintners Federation.

The Government’s hike in VAT from 21 to 23 percent took effect from January 1, but it is only in recent weeks that prices have begun to rise in pubs. The 2% increase would average at about seven cent on a pint, but publicans have been forced to add ten cent to the price for common sense reasons, increasing to €4.10 for a pint of stout and to €4.50 for a pint of lager.

However, punters have been faced with the bizarre situation that some pubs have yet to pass on the increase, as it is up to the publican to do so.

Jerry O’Dea, Limerick’s national executive council delegate with the Vintners’ Federation of Ireland (VFI), who has a pub on Mulgrave Street, explained the situation.

“Some publicans have passed on the increase, I believe, in recent weeks and will tend to do so when stocks run out,” he said.

“Some have and some haven’t. I think the consensus is that eventually most publicans will have to add it on, because of course you can’t keep absorbing costs like that.”

The VFI lobbied the Government not to increase the rate and are now fearful for the survival of businesses.

“We feel it will be hugely detrimental to trade, things are bad enough and we have a huge problem with the situation where you have below cost selling of alcohol in supermarkets,” said Mr O’Dea.

“We feel that they are hitting the “on-trade” as opposed to the “off-trade” and the costs are much higher in the on trade. We have already seen a lot of closures in the last 12-15 months. This is hitting an already stretched industry.”