Budget 2026: Draught Rebate Scheme would be 'vital lifeline' for rural pubs

Eva Osborne

The Vintners’ Federation of Ireland (VFI) is urging the Government to introduce a Draught Rebate Scheme in next month’s Budget.

It said said the scheme would act as a "vital lifeline" for rural pubs most at risk of closure.

The scheme, capped at €20,000 per pub, would return 40 per cent of excise duty on draught beer and cider (up to 5 per cent ABV), at an annual cost of €73 million.

Crucially, VFI said, the majority of funds would flow directly to the smaller, traditional pubs that form the "backbone of community life" across rural Ireland.

VFI chief executive Pat Crotty said: “If Government fails to act, Budget 2026 will be remembered as the year rural pubs were abandoned.

"The Draught Rebate is the difference between survival and closure for thousands of small pubs that keep communities alive.

“This scheme is designed to help the pubs that need it most. Traditional drink-only pubs are excluded from the proposed 9 per cent hospitality VAT rate and are battling soaring costs, from Government-driven payroll increases to insurance, energy and supply hikes.

"Unless Government intervenes with the Draught Rebate, many of these small rural pubs will simply not survive. We are talking about protecting businesses that are also community centres, employers and part of Ireland’s cultural fabric.”

The federation said that a typical rural pub selling around 245 kegs a year would receive a rebate worth just over €4,700 annually, delivered through the VAT system.

"This is not a windfall but a modest support that helps offset wage and utility increases and sustain opening hours,” Crotty said.

Alongside the rebate, the VFI is also calling for the reinstatement of the 9 per cent VAT rate for food services, to "ease the burden on food-led pubs" that have struggled since VAT was increased by 50 per cent in 2023.

“This is about fairness and survival. The Draught Rebate is simple, capped and targeted. It will mean the difference between survival and closure for countless rural pubs. Government must act decisively on Budget Day," Crotty said.