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.
'Struggle'
“These statistics once again underline the importance of reducing the VAT rate on food," said Donall O’Keeffe, CEO of the LVA.
"Since the government hiked the VAT rate by 50% last year we’ve seen businesses across the hospitality sector struggle."
Dublin Pubs
The research shows that 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 do not open every day is that it is not economical to open on certain days.
Almost 6 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.
'Logical Approach'
“Business is declining, prices are increasing and potential jobs are being lost due to the government’s approach to VAT in hospitality," said O’Keeffe.
"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."
Turnover
According to the research, food typically accounts for 35% of the turnover of pubs across in Dublin, a figure which reaches as high as 50% in many pubs.
Over 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.
'Upcoming Budget'
“It is vitally important that the government addresses this in the upcoming Budget and reinstates VAT 9% on food," said O’Keeffe.
"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."
