The Vintners Federation of Ireland (VFI) has released details of a new report that states that up to 22,500 jobs are at risk in the Irish drinks and hospitality industries.
The newly-published report, which was commissioned by the VFI, the Licensed Vintners Association (LVA) and Drinks Ireland and authored by DCU economist Anthony Foley, states, "Even if pubs regain half their normal capacity by the end of 2020, which is an optimistic scenario, as many as 22,500 jobs could be permanently lost, not to mention countless more in supporting trades like catering, security, and entertainment."
It also states that on-trade pub alcohol sales will decline by 50% or more for the second half of 2020, and that this is "our most optimistic market expectation."
"A Sector That Requires Government Intervention"
Foley said, "We anticipate that economy-wide and hospitality-related levels of consumer demand will be lower after lockdown due to the higher level of unemployment and reduced earnings. It will likely be 2023 before we reach pre-COVID labour market conditions. Without doubt, Ireland's drinks, hospitality and tourism sectors have been among the worst impacted. Due to restrictions, there is almost zero tourism and reduced demand in our hospitality sector. This impacts our entire economy and so represents a sector that requires government intervention."
"Thousands Of Jobs And Businesses At Permanent Risk"
Meanwhile, VFI chief executive Padraig Cribben commented, "The greatly worsened post-COVID commercial model - reduced physical capacity, demand and timed customer visits to the pub - puts thousands of jobs and businesses at permanent risk. Most bars will reopen with only 40% of their customers, indefinitely. Pubs closed for four months and are continuing to experience the harsh realities of the pandemic, taking the necessary precautions, and adapting accordingly. Government policy needs to adapt too. A reduction in the VAT on alcohol would deliver an immediate support to these businesses and instantly improve their commerciality, supporting the initial recovery phase and survival of pubs over the next few months as demand is reduced and costs increase. The alternative is many bars will never open again, and the pre-COVID employment and economic contributions will not be recovered."
"Not Justifiable"
LVA CEO Donall O'Keeffe added, "About one third of the alcohol revenues generated by the on-trade sector, including public houses and other licensed premises, is taken by government and diverted from customers, staff, entrepreneurs and investment. This very large tax burden is not justifiable in the exceptional circumstances we are in faced with - a severe national and sectoral economic situation - caused by COVID-19. All businesses must adapt and adjust to the new reality which the drinks and hospitality industry has done. Now, government and the exchequer must adjust its tax expectations accordingly and support one of our key domestic industries."
"Must Act Now"
Additionally, Drinks Ireland director Patricia Callan stated, "The recent government report 'Economic Considerations for Reinstating Economic Activity' concluded that the accommodation and food sector (including pubs and restaurants) had a high vulnerability to permanent damage or output loss. We must act now and provide support to critical industries with ambitious policy decisions. Traditionally, a VAT cut would enable businesses to reduce prices and stimulate demand. In this case, we are seeking a temporary VAT cut on alcohol to support businesses. This type of policy measure is the direction we need to go. It will deliver immediate and tangible support for an industry that is a substantial economic contributor."
The report was commissioned by the three organisations as part of their new "Protect our Pubs" campaign.
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