The Licensed Vintners Association (LVA) has slammed the Government’s treatment of the hospitality sector in Budget 2025, saying it shows they are treating hospitality as an “economic afterthought”.
The LVA pointed to the lack of action on VAT9, the lack of reduction in excise duties which remain amongst the highest in Europe and the lack of measures that will provide practical support to struggling hospitality businesses. They also highlighted how the Government measures will increase costs for small businesses and hospitality with a 6.3% rise in the minimum wage, further increases in employers’ PRSI and the pension auto-enrolment due to begin next year.
During their interactions with Ministers and Government in advance of the Budget, the LVA had made clear that small cash grants would not be an effective or appropriate means of addressing the structural problems facing the industry. So they were very disappointed to see the only solution put forward by the Government being a small cash grant.
The LVA estimates 1 in 3 pubs in Dublin will not even qualify for this measure.
“This is a Budget which shows how little the Government has been listening to the hospitality sector,” said Donall O’Keeffe, CEO of the LVA. “We have been treated like an economic afterthought. They obviously do not view the struggles that are impacting our sector as important. It doesn’t concern them that almost every day we see well known small businesses all around Ireland shutting their doors for good. It also doesn’t seem to bother them that it is the Government themselves who are key contributors to the problems in hospitality.
“The Government is mandating multiple structural step changes in our cost base. VAT, employers’ PRSI, sick leave entitlements, pension auto enrolment, minimum wage increases, this all adds up and puts an extensive additional burden on our industry. It is no wonder that so many small businesses are struggling.
“Yet when the Government has the opportunity to address these problems in the Budget, they do nothing of value. After explaining to them a small cash grants are ineffective and don’t provide solutions to a systemic change, what does the Government do? They opt for a small cash grant. We estimate at least 1 in 3 pubs in Dublin won’t even qualify for that measure. There is zero in this Budget for the hospitality businesses that create the most jobs and generate the most tax revenue for the Exchequer.
“It seems quite clear to us that once the Government decided they wouldn’t address the VAT rate they had no other ideas for the hospitality sector. A so called ‘Giveaway Budget’ which gives hospitality nothing, again illustrating how much of an afterthought we are to the decisionmakers around the Cabinet table. So much for all their claims of hearing our concerns,” Mr. O’Keeffe concluded.