The Licensed Vintners Association (LVA) said the Government’s Budget announcements will be a boost for pubs and the night time economy, with energy grants and cuts on the cost of late night trading benefitting the sector.
In the run up to the Budget, the LVA has been very vocal about the rising cost of energy prices and the knock-on effect this is having on pubs. Dublin publicans have reported steep increases already being applied to their bills, with some noting they had experienced a fourfold increase. Further energy costs increases are anticipated across the sector in the months ahead. Accordingly, this was a priority measure for the LVA and its members in Budget 2023.
Speaking about the impact of Budget on the sector, Donall O’Keeffe, Chief Executive of the LVA said, “The energy grants seem balanced and comprehensive, which is the type of positive and effective measure that was required. The rise in energy costs has been the financial issue impacting pubs across Ireland the most in recent months and we expect that will become even more acute as the winter rolls in. Action was needed to address this problem, or there would have been flickering lights in pubs at more than just last orders. So we are very pleased to see a scheme of this scope announced in the Budget.”
It was also confirmed there will also be a 50% reduction in the cost of Special Exemption Orders (SEOs), which all licensed premises who wish to open late are required to secure. SEOs allow these licensed premises to operate two hours after normal closing time. Before the Budget the cost of SEOs had been €410 per night of late night trading.
“It is also very positive to see the action the Government has taken to assist the late night economy. Pubs and all licensed venues have to pay an additional charge of €410 to the Government for every night they wish to open late. Cutting that by half makes sense as the Government seeks to encourage the further development of the night time economy. We will be continuing to campaign for the complete abolition of the out-dated SEO system in the upcoming licensing reform bill,” he said.
However the LVA was disappointed by the Government’s decision to not extend VAT 9 for the hospitality sector beyond the end of February 2023. “While VAT 9 doesn’t apply to alcohol, it has been very important for pubs who serve food – which is a substantial and growing portion of the business,” Mr. O’Keeffe added. “So any curtailing of VAT 9 is very disappointing in that context. It will act as a significant inflationary measure, at a time when we are already grappling with escalating costs on multiple fronts. With prices already rising, VAT 9 will continue to deliver greater Exchequer returns anyway. If there is no extension of VAT 9, the real impact of increasing the level of VAT by 50% will be to put a dampener on hospitality demand.
“The current VAT measures continue until the end of February 2023, so we look forward to further engagement with Government and hope they will extend this rate beyond the current timeframe,” Mr. O’Keeffe concluded.