Half of Dublin food pubs see business decline due to VAT hike
Typically, food accounts for 35% of the turnover of pubs across Dublin, a figure which reaches as high as 50% in many pubs
Almost one in two (48%) Dublin pubs who serve food say the VAT increase has led to a drop in their business, according to new research conducted by the Licensed Vintners Association (LVA). Seven out of 10 food pubs in the capital also say the VAT increase has made them less likely to hire new staff.
Three out of four pubs (73%) who serve food increased their prices on the back of the VAT hike introduced by the Government last year. This has led to a €1 increase per average dish in 24% of the food pubs, a €1.50 jump per menu item for 22% of these pubs and a €2 hike on average for 17% of pubs.
Since the VAT increase was imposed, 42% of Dublin pubs who serve food say the VAT increase has led to a reduction in lunch and dinner orders while 14% say it has impacted on dessert purchases and 11% breakfast orders.
Two out of three Dublin pubs (68%) who serve food do so every day of the week. One in six food pubs say the reason they don’t open every day is that it isn’t economical to open on certain days.
Almost six out of 10 (58%) of all Dublin pubs (food and non-food) also believe the Government has not treated the hospitality sector well in recent times, with only 14% having a positive view of the Government’s approach to the sector.
Typically, food accounts for 35% of the turnover of pubs across Dublin, a figure which reaches as high as 50% in many pubs.
More than 350 pubs from across Dublin took part in the survey, approximately half the total number of pubs in the capital. Currently, approximately 550 pubs in the capital serve food.
Donall O’Keeffe, CEO of the LVA said: “These statistics once again underline the importance of reducing the VAT rate on food. Since the Government hiked the VAT rate by 50% last year we’ve seen businesses across the hospitality sector struggle. This survey shows it is also impacting Dublin pubs, with half of those who serve food saying it has led to a drop in business.
“Business is declining, prices are increasing and potential jobs are being lost due to the Government’s approach to VAT in hospitality. This could have been easily avoided if they had taken a more logical approach and retained the 9% VAT rate on food. Meals in pubs aren’t a luxury and all the Government did with their blanket increase was damage the viability of the sector at a time when the Government is awash with money.”
According to O’Keeffe, it is vitally important that the Government addresses this in the upcoming Budget and reinstates VAT 9% on food. The Government is continually insisting that it is listening to small business. Then they should be clear that the entire hospitality sector is calling for VAT9% on food and that is the Government policy response that matters.
“As our survey also highlights, there is a high level of discontent with the Government across the sector. That unsatisfaction will only increase if the VAT rate isn’t addressed come Budget time,” O’Keeffe concluded.
