October 24, 2020
Business News

Level 3 lockdown will cause ‘incalculable damage’ to Kilkenny’s pubs, restaurants and hotels: industry group

The Level 3 Covid-19 restrictions that came into effect from midnight last night will have a devastating impact on Kilkenny’s pubs, restaurants and hotels, in industry group has claimed.

The Drinks Industry Group of Ireland (DIGI) has severely criticised the Government’s decision to move the entire country to Level 3 as it published a new report that shows Ireland continues to have the second highest overall rate of excise tax on drinks in the EU.

DIGI called on the Government to reduce the tax burden on hospitality businesses or many would simply go bust.

“We’re in a situation where the hospitality industry is unfairly and disproportionately impacted as a result of Covid-19. Wet pubs in Dublin have yet to reopen – seven months later – and the Level 3 ban on indoor seating for every other licensed premises mean many will shut their doors. Allowing these businesses to reopen, whenever that might be, with exorbitantly high rates of tax to pay is indefensible,” DIGI chairperson Liam Reid said.

Ireland has the highest excise on wine in the EU, the second highest on beer (behind Finland), and the third highest on spirits (behind Sweden and Finland).

The report, Tax on Ireland’s drinks and hospitality industry: how Ireland’s excise tax on drinks compares with other EU countries and the UK, commissioned by DIGI and written by DCU Business School economist Anthony Foley, puts Ireland second of the excise league table, despite producing and exporting some of the world’s most renowned drinks products, such as stout (54 cents of excise on every pint served) and whiskey (60 cents of excise on every glass served).

In comparison, in beer-producing Germany, excise of only five cents is levied on a pint of lager. In France, only one cent of excise is levied on a glass of wine. In Italy, Spain, and thirteen other EU countries, no excise is charged on wine.

A recent DIGI report showed as many as 114,000 jobs in accommodation and food services, which includes drinks and hospitality, could be lost by the end of 2020 and early 2021 without strong and immediate government action. Young people, women, and rural areas are particularly at risk of unemployment.

Mr Reid added: “Though they face hardship, Ireland’s drinks and hospitality business owners have adapted to the pandemic, investing thousands of euros in masks, partitions, Perspex screens, and deep cleaning to keep their staff and customers safe, and their doors open.

“DIGI believes it is now time for the government to adapt as well. In the interest of a fair and rapid economic recovery that will benefit thousands of businesses, rural Ireland, and young people, we strongly urge the government to reduce excise tax on drinks products by 15% minimum in Budget 2021. This can be done overnight, requiring no new legislation.

“This is a highly targeted measure that would have an immediate effect on the drinks and hospitality industry, putting more money back in the pockets of hoteliers, publicans, restauranteurs, brewers, and distillers, allowing them to quickly re-hire staff, service debt, offset reduced capacity penalties, and prepare for a challenging economic period.”

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