Members of the Donegal Vintners’ Federation have raised serious concerns about the future of their industry.
Publicans from across the county gathered in Cheers Bar, Ballybofey last Wednesday to discuss the devastating impact of rising operational costs, particularly the higher VAT rate, which they say is crippling small businesses in rural areas like Donegal.
Publican and owner of Cheers Bar, Cllr Martin Harley, speaking on behalf of the association and the sector nationwide, highlighted how rural businesses are struggling to keep up with escalating expenses, particularly electricity and supply chain costs.
“All it’s doing is driving people into off-licences and people are sitting at home drinking, which is not healthy either,” he said.
Publicans feel caught in a bind as they are unable to pass the increased costs onto their customers, fearing it would further reduce trade.
Many customers are priced out of socialising in their local pubs, leading to a significant drop in footfall.
“If people are in a pub socialising, it’s better for their mental health,” Cllr Harley added, stressing the importance of social outlets in rural communities.
“The 23 percent rate on the alcohol is a big one, we need that to be reduced back.”
The situation, Cllr Harley said, has reached a tipping point. Though the summer months brought some relief, thanks to an influx of visitors, he fears more closures are inevitable as winter approaches.
“People have survived here in the summer with a few extra people about, but I can see more pubs and restaurants closing now over the next number of months.”
The meeting also served as a call for urgent government intervention to prevent more closures, particularly in rural areas. Cllr Harley noted that even establishments in Dublin, with much higher footfall, are struggling.
“When you see restaurants closing in Dublin that have footfall, then what chance does Donegal have?”
The association is urging the government to reinstate the lower VAT rate that had previously been in place. Harley emphasised that a sustainable solution is needed to help these businesses survive.
“We need help. We need help urgently. We need the 13.5 per cent back down to nine, we need the 23 per cent back again to 21 per cent where it was for years. And we need some supports put in place regarding energy costs.”
One-off payments are not enough to sustain the sector, Cllr Harley stressed.
“It’s no good giving the one-off payment. We need something that’s sustainable. There needs to be something done urgently to save business and to save jobs.”
The future looks increasingly uncertain for the industry, and the vintner members insist that without swift government action, many rural pubs and restaurants could soon be forced to close their doors for good.
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