Pubs are expected to run 50% of their usual revenue for the period between August and December 2020, according to a newly released report from DCU Economist Anthony Foley.
The report was Commissioned by The Licensed Vintners Association (LVA), Vintners Federation of Ireland (VFI) and Ibec representative group Drinks Ireland, and pushes for a temporary reduction in the hospitality VAT rate and extending it to apply to sales of alcohol in the on-trade (pubs and bars) until 31st December 2020.
Some EU members have made use of a reduced VAT rate for on-licence consumption.
The expectation is that the lower VAT rate will substantially increase the business confidence of publicans, generate much higher survival and revival rates, and enable an improved business model that will drive the sector to increase supply capacity and thereby win back more of the “lost” market.
According to the analysis, the cost of reducing VAT from 23% to 9% would amount to €143m.
Under the scenario of pubs running at 50% of their typical revenue for the period, as many as 22,500 people could lose their jobs by the end of 2020.
Pubs and bars generate almost 50,000 jobs in Ireland normally.
The report also claims that many bars will reopen with only 40% of their customers ‘indefinitely’.
With a third of pubs in Dublin still closed, over 60% of pubs in Ireland smaller cities, towns and villages remain closed.