48% of Dublin pubs say VAT hike led to fall in business

Nearly half of Dublin pubs (48%) who serve food say the VAT increase has led to a drop in their business, new research conducted by the Licensed Vintners Association (LVA) shows.

The research also reveals that seven out of 10 food pubs in Dublin say that the VAT increase has made them less likely to hire new staff.

73% of Dublin pubs who serve food increased their prices on the back of the VAT hike introduced by the Government last year.

This resulted in 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% on breakfast orders.

Over 350 pubs from across Dublin took part in the survey, about half the total number of pubs in the capital. Currently, about 550 pubs in the capital serve food.

Today’s research also shows that 68% of Dublin pubs who serve food do so every day of the week. One in six food pubs say the reason they do not open every day is that it is not economical to open on certain days.

58% of all Dublin pubs 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 in Dublin, a figure which reaches as high as 50% in many pubs.

Donall O’Keeffe, chief executive 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,” Mr O’Keeffe said.

“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,” he said.

“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,” he stated.

He said it is vitally important that the Government addresses this in the upcoming Budget and reinstates VAT 9% on food.