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More than half have seen food sales decline since higher VAT rate was introduced
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Lunch is the meal which has seen biggest drop off in orders
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9 out of 10 want VAT9 applied from Budget Day
2 in every 5 (42%) food pubs in Dublin plan to reduce their staff if the lower VAT rate for food is delayed to 2026, according to a new survey from the Licensed Vintners Association (LVA). A further 1 in 10 (10%) food pubs will also consider putting a stop to serving food altogether, with a similar number planning to reduce the number of items served on their menus should the promised VAT reduction not proceed.
More than half (51%) of Dublin’s food pubs have seen their food sales decline since the higher VAT rate was introduced in September 2023. While 1 in 5 (21%) say they have seen a drop in sales of more than 10% and approximately 1 in 12 pubs in the capital say they have stopped serving food following the application of the higher VAT rate.
Lunch is the meal which has seen the largest drop off since the introduction of the higher VAT rate, with 5 out of 8 food pubs (62%) saying they have seen a decline in the number of orders. One in three food pubs (34%) say they’ve also seen a drop in dessert orders, almost three in ten (28%) have experienced a decrease in customers ordering dinner and 22% have seen the number of breakfast orders diminish.
7 out of 10 food pubs also say they have had to reduce the number of dishes served on their menus since the higher rate of VAT took effect.
Almost 1 in 2 (52%) food pubs have stopped serving steak due to cost reasons, 1 in 4 (26%) say they’ve had to stop serving seafood and 1 in 6 (17%) have stopped serving roast dishes. While 2 out of 3 food pubs (65%) say the cost of ingredients has increased by more than 10% over the last 12 months and more than 1 in 4 (28%) put the increase in costs at higher than 20%.
Another point of interest highlighted in the survey was that a significant number of food pubs in the capital are being selective about the days they serve since the higher VAT rate was introduced. 20% of Dublin’s food pubs don’t serve food on Mondays with 19% not serving food on Tuesdays.
92% of pubs want to see VAT 9 rate applied from Budget Day and just 8% from 1st January 2026, while 96% of Dublin pubs want the VAT rate for food to be permanently left at 9%.
Just over 200 of the capital’s pubs took part in the survey. Currently approximately 550 pubs in Dublin serve food.
Speaking about the survey results, Donall O’Keeffe, CEO of the LVA said, “As the results of this survey highlight, food pubs throughout Dublin, as well as the wider hospitality sector, continue to feel the burden from the Government imposed higher VAT rate on food. When you see 2 in every 5 pubs are considering reducing their number of staff if the VAT reduction is delayed, you get a clear sense of how difficult the trading environment is and how unhelpful recent rhetoric from Government about delaying VAT 9 has been for the hospitality sector.
“The fact remains the Government made a clear commitment to hospitality that VAT 9 would be introduced no later than the beginning of 2026 and we expect them to abide by that commitment. In fact, most of the hospitality sector wants to see the reduced VAT rate take effect from Budget Day. Higher taxation regularly takes effect from Budget Day onwards on items like petrol or cigarettes, while the increased VAT rate was introduced in September. So, we don’t see why the lower rate can’t apply from that date. It would certainly make a massive difference to the hospitality sector for the remainder of what has been a challenging trading year.
“Any delays will have real and immediate impacts across the hospitality sector. Whether that is seen in a loss of jobs or the closure of businesses. The Government must ensure that a VAT 9 reduction is put on the menu at the earliest possible juncture or the entire hospitality sector will be sure to let them know what we think of their lack of support for our industry,” Mr. O’Keeffe concluded.