Publicans are seeking a special tax credit scheme on draught beer, valued at €20 per 50 litre keg, as lobbying for this year’s Budget begins. The Vintners Federation of Ireland (VFI) has met with Taoiseach Micheál Martin and ministers to campaign for the tax credit, which would only be applied to draught beer.
The VFI previously lobbied for a reduction in excise duty on alcohol, but the move was resisted due to the fact that the excise would have to be applied to all alcohol sold in the State, not just that sold in pubs.
More than 2,200 pubs have closed in Ireland since 2005, representing a 25.6% drop.
The rate of closure has continued to intensify, with the average rate of closure over the past 20 years standing at 112 per annum.
This has since increased to 128 closures per year for the period 2019-2025, indicating an increasing rate of market failure, according to publicans.
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The proposed tax credit scheme would save publicans the equivalent to 40% of the excise paid on a keg of Guinness and would be calculated based on the verified number of kegs purchased and supplied to the pub in the previous year.
According to the VFI, the tax credit would be capped at €20,000 per licensed premises per annum, ensuring the benefits are more proportionately directed towards smaller pubs.
The group has claimed that the total cost of the proposed tax credit scheme in a full year would be around €75million, which is approximately half of the estimated annual cost of the Section 481 film/TV tax credit in 2026.
Responding to parliamentary questions on the matter, Tánaiste Simon Harris said the Government is conscious of the challenges facing all businesses in the current economic climate, including the pub sector.
He noted that there had been no general increase in excise duty rates for alcohol since 2014 and that the total tax as a percentage of the retail price of each pint is now lower than it was more than a decade ago.
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However, he added that the matters raised in the submission will continue to inform ongoing policy considerations in the context of the budgetary process.
Eoin Lyons, the head of marketing and communications for the VFI, said the move was unlikely to lead to cheaper pints and was simply to help rural pubs stay in business.
He said the VFI was happy the proposal was fully compliant with EU law and that it was a focused measure, having received a good reaction from across Leinster House.
The VFI has met with Enterprise Minister Peter Burke, junior minister Seán Canney, and others alongside the Taoiseach recently to discuss the proposal.
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