Almost half (48 per cent) 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.
Three out of four pubs (73 per cent) who serve food increased their prices on the back of the VAT hike introduced by the Government last year. This has led to a €1 increase per average dish in 24 per cent of the food pubs, a €1.50 jump per menu item for 22 per cent of these pubs and a €2 hike on average for 17 per cent of pubs.
Since the VAT increase was imposed, 42 per cent of Dublin pubs who serve food say the VAT increase has led to a reduction in lunch and dinner orders while 14 per cent say it has impacted on dessert purchases and 11 per cent breakfast orders.
Two out of three Dublin pubs (68 per cent) who serve food do so every day of the week. One in six food pubs say the reason they don’t open every day is that it isn’t economical to open on certain days.
Almost 6 out of 10 (58 per cent) 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 per cent having a positive view of the Government’s approach to the sector.
Typically, food accounts for 35 per cent of the turnover of pubs across in Dublin, a figure which reaches as high as 50 per cent 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.
Speaking about the survey, Donall O’Keeffe, chief executive of the LVA, said: “These statistics once again underline the importance of reducing the VAT rate on food. Since the Government hiked the VAT rate by 50 per cent last year, we’ve seen businesses across the hospitality sector struggle. This survey shows it is also impacting Dublin pubs, with half of those who serve food saying it has led to a drop in business.
“Business is declining, prices are increasing and potential jobs are being lost due to the Government’s approach to VAT in hospitality. This could have been easily avoided if they had taken a more logical approach and retained the 9 per cent 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."
Mr O'Keeffe added: “It is vitally important that the Government addresses this in the upcoming Budget and reinstates VAT 9 per cent on food. 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 VAT 9 per cent on food and that is the Government policy response that matters.
“As our survey also highlights, there is a high level of discontent with the Government across the sector. That unsatisfaction will only increase if the VAT rate isn’t addressed come Budget time."
