There was good news in Budget 2022 for Ireland’s hospitality sector, in particular drinks producers, as the Government continues to balance a fragile recovery with budgetary constraints.
The major news is a 50% excise relief for independent small producers of cider and other fermented drinks. This is a long overdue move that puts cider producers in line with their craft beer counterparts.
Seamus O’Hara, the Chair of Drinks Ireland|Cider and Founder and CEO of Carlow Brewing Company, which produces a range of cider brands including Falling Apple and Craigies said: “There are at least a dozen craft cider producers scattered across Ireland that will benefit greatly with this reduction, enabling further investment, job creation and innovation. The move will benefit the wider cider sector by allowing expansion of and greater consumer interest in the category. It will also result in downstream benefits to the wider economy, particularly in retail, hospitality, and tourism.”
Jonathan McDade, Head of Cider at Drinks Ireland, added: “This announcement follows a substantial lobbying campaign by Drinks Ireland|Cider which has called for the excise relief programme, currently enjoyed by craft brewers, to be extended to the craft cider sector. Since that excise reduction over 15 years ago, the number of indigenous craft breweries in Ireland has increased from 8 to 75. We look forward to engaging with the Department and the Revenue Commissioners on the practicalities of introducing the scheme in the coming months.”
The Government has also held back on increasing excise duty on alcohol.
Meanwhile, the reduced VAT rate of 9% for hospitality businesses will remain in place until the end of August next year. This has been cautiously welcomed by the sector, which remains conscious of the impact a VAT increase will have in September 2023.
The Licensed Vintners Association (LVA) has warmly welcomed the waiving of Government charges on late night venues for the rest of year. Any licensed premises seeking to operate late must secure a Special Exemption Order (SEO) in advance. Each SEO requires a payment to the Government of €410 per night for each individual venue.
The Government has also extended the commercial rates waiver until the end of the year, and the EWSS scheme will remain in place until April 2022.
Speaking after Budget 2022 was unveiled, Vintners’ Federation of Ireland (VFI) Chief Executive Padraig Cribben said: “Budget 2022 recognises that significant challenges remain for the pub sector. By maintaining the EWSS until next April and keeping the commercial rates waiver in place until the end of year the Government is giving publicans a chance to trade out of the most difficult 18 months imaginable.
“While we welcome the fact excise duty is not increased, this was a missed opportunity to lower Europe’s second highest tax on alcohol. Reducing excise duty would incentivise publicans to reinvest in their businesses and increase our competitiveness once tourists do return.”