Cork publicans call for current vat rate to remain amid concerns for the industry

TWO Cork publicans have called on the Government to retain the current 9% Vat rate for the tourism and hospitality sector, stating that an increased rate would have a detrimental impact on the industry.

The reduced 9% Vat rate is due to end on August 31 and revert to 13.5%, after the lower rate was temporarily introduced in November 2020 to help the sector in the aftermath of covid.

Michael O’Donovan, chair of the Cork city and county Vintners’ Federation of Ireland, said the return of the increased rate will have “a huge impact”.

“Food business is a low margin, high volume business so another 4.5% increase on top of what you are making will put a lot of businesses under severe pressure for the next number of months,” he explained.

“We think the 9% Vat rate is the right rate. 

"When we are competing for tourists to come here, we will be looked at like an expensive destination. We are hoping the Government will reconsider this decision and reinstate the 9% rate in the next budget.”

Ernest Cantillon, owner of Sober Lane and Electric, added: “I am very worried about the potential increase for Vat. We are trying to remain competitive but we would have no choice but to pass on the increase. There is no possibility of us absorbing that increase.

“My concern is that people will go out less often,” he said. “There are a lot of costs associated with a night out, such as paying a babysitter and a taxi.

“The minimum wage going up means you will have to pay the babysitter more. 

"I am not looking forward to putting up my prices again but I can’t see a way where I won’t unless they maintain the current rate.”

Mr O’Donovan, who is the owner of the Castle Inn on South Main St, said the summer has seen “steady” business in the sector.

“August bank holiday weekend traditionally in the city is a quieter weekend. We had the Pride festival on which did bring people in. A lot of people use the weekend to go on a final break away from the city before the winter comes in.

“I think the summer so far has been steady. There has been a good influx of tourists. It is very noticeable seeing them in the streets and coming in and out of the bars. There has been a lot of American and continental-European visitors.

Staffing Issues

“Staffing is still a big issue,” added the Cork publican. “People are having to get more staff to do the same job because there is no experienced staff out there. Trying to get the staff and the quantity of staff is still a huge issue for many.”

Ernest Cantillon said they reduced their opening hours to combat the problem of having the right number of employees. “We haven’t found it hard to recruit staff members over the summer. We reduced our opening hours. We don’t do lunches, so we don’t need as many staff members. We have our core staff members. We look after them and we have good staff retention.”

Mr O’Donovan is looking forward to third level students returning to the city when the new academic year begins in September. “Life in the college begins again on September 11 so the students will be moving in that week. 

"That brings a great buzz around the city. 

"You will have 30,000 students coming back into the city which is great for business,” he added.