Limerick publicans in appeal to Noonan over tax hikes

Mike Dwane

Reporter:

Mike Dwane

LIMERICK publicans have again appealed to Minister Michael Noonan to reconfigure how taxes on alcohol are levied to ensure a fairer playing field for the local pubs they say are being squeezed by discount selling by major retail chains.

LIMERICK publicans have again appealed to Minister Michael Noonan to reconfigure how taxes on alcohol are levied to ensure a fairer playing field for the local pubs they say are being squeezed by discount selling by major retail chains.

Dave Hickey, of South’s Pub, estimates that 112 pubs in Limerick city and county have gone out of business in the last seven years.

“When I was the chairman if the Limerick vintners way back in 1986, there were around 500 members in the city and county and now there are only 230, about 100 of them in the city,” said Mr Hickey.

“And with every pub that goes you are talking about three or four jobs, so hundreds of jobs in Limerick have been lost over the last number of years,” Mr Hickey told the Chronicle.

In a pre-budget submission, the Vintners Federation of Ireland urged Minister Noonan to consider restructuring alcohol taxes in a way that would allow pubs compete on a level playing field with major retailers, a proposal Mr Hickey said would have brought in €240 million for the Exchequer with raising excise on the pint.

The vintners “lid levy” would have introduced a 15% tax on all unopened alcohol products sold in the off-trade, a measure they said would have protected 50,000 pub jobs nationally and helped government counteract cheap alcohol sales in the supermarket.

That appeal has fallen on deaf ears and the excise hike in the budget combined with price increases from major brewers like Diageo and Heineken has seen the price of the pint rise in most Limerick pubs by 20 cent in recent weeks.

Mr Hickey joined VFI chairman in Limerick Jerry O’Dea and Cllr James Collins, proprietor of Collins’ in Dooradoyle, for a discussion on Limerick’s Live 95FM on Monday.

Mr O’Dea said that for every €1 spent on alcohol in pubs, the Exchequer was taking in 52 cent in excise, VAT and other taxes - and it was in the government’s own interest to provide some relief for the under-pressure licenced trade.

“Excise tax is a very crude instrument and there is the law of diminishing returns coming into play when the volume of sales goes down, the excise collected goes down too,” said Mr O’Dea, who runs his pub on Mulgrave Street.

Cllr Collins said that while restaurants had benefited from a reduced VAT rate to stimulate tourism, pubs were being hit by excise hikes and an increase in prices from suppliers.

“With our overheads, we wouldn’t be able to absorb that cost of 20 cent on each pint without wiping out our margin completely,” Cllr Collins said.