Publicans call for 40 per cent rebate in excise on pints in bid to save rural pubs
'These are businesses at the heart of their communities, providing employment, social connection and play a key role in our tourism offering'
The Vinters Federation of Ireland (VFI ) has called for a 40 per cent rebate in excise on pints of beer in a bid to save rural pubs.
The VFI claims that a rebate on draught beers would help protect rural pubs as the sector struggles with increasing costs.
Ahead of its annual general meeting in Limerick this week, VFI chief executive Pat Crotty said publicans are not asking for a handout, 'we are asking for fairness'.
'These are businesses at the heart of their communities, providing employment, social connection and play a key role in our tourism offering,' Mr Crotty said.
The call comes in the wake of figures from the CSO earlier this month that revealed how bar sales dropped 9.9 per cent in the 12 months from March 2024.
This was the largest annual drop in volume sales of any sector.
As tax of €1.62 makes up around 28 per cent of the price of a pint, a 40 per cent rebate on the excise charged on draught products is a 'practical, targeted support that would make a real difference for small pubs across Ireland,' the VFI said.
With taxes accounting for nearly 30 per cent of the price of a pint – the second-highest excise rate on alcohol in Europe - his is placing severe financial pressure on publicans, particularly in rural areas, the VFI said.
The VFI argues that while the proposed VAT reduction for hospitality of 9 per cent in the next budget, is welcome, it will only benefit pubs that serve food, leaving traditional pubs without support.
The VFI claims the draught rebate, in contrast, would ensure that all pubs, regardless of size or location, benefit.
VFI estimated that a rebate would cost the State €73m annually but said this was 'a small fraction of the Vat proposal', which is estimated to cost around €545m.
'Rural pubs are facing an existential crisis,' Mr Crotty added. 'We have seen hundreds of pubs close their doors in recent years.
'If this trend continues, we will lose a vital part of Irish culture and community life. A draught rebate is a simple, fair, and targeted measure that would provide immediate relief.'
It's not envisaged the price of a pint would come down if the rebate was approved though individual publicans "would be perfectly entitled to lower price if they wish", a VFI spokesman said.
One of hardest hit regions of Ireland is that of the North West which has experienced significant pub closures in the last 20 years.
According to Ocean FM, figures estimate that in excess of 200 pubs have closed in Sligo, Leitrim and Donegal in that time.
An excise rebate scheme based on a report written by Anthony Foley from DCU Business School details how a public house provides evidence from suppliers that it purchased a certain number of tax-compliant kegs of qualifying beverage.
The rebate of 40 per cent is calculated by Revenue, up to a maximum of €20,000. The appropriate rebate is credited to the VAT due in each VAT period of the following year.
For example, a 50-litre keg of Guinness contains 88 pints and generates €47.36 in excise per keg. A 40 per cent rebate would be €18.94 per keg.
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News in 90 Seconds - May 13th
To receive the full rebate of €20k, a public house would need to sell 1,056 kegs annually or 20.3 kegs weekly. Most rural pubs would not sell this volume of kegs.
The annual excise rebate would be capped at €20k per licensed premises.
The rebate applies to on-licensed premises which are fully compliant in tax and other regulatory matters.
The rebate applies only to draught alcohol products with a maximum ABV of 5%. In effect, this means it is confined to beer/cider. The restriction of the rebate to draught products ensures the measure is focussed on public houses and other bars.
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