The Vintners’ Federation of Ireland (VFI) says today’s decision by the Government to increase the hospitality VAT rate to 13.5% is a shocking and retrograde step that will cause excessive damage to the sector.

Padraig Cribben, Chief Executive, VFI states: “Removing the 9% VAT rate in today’s Budget is a kick in the teeth for the hospitality sector. It will introduce uncertainty and undermine confidence in many pubs selling food who are already worried about their exposure to the effects of Brexit. Publicans in areas of the country where the recovery is weak will be disproportionately affected.

“During the recession, many pubs invested heavily in a food offering that provided exceptional value to consumers along with job security to staff. The VAT increase will reduce competitiveness and force many of those pubs to cut staffing levels. It is simply impossible for most business owners to absorb this increase.

“Today’s news is a hammer blow to our members who employ over 40,000 people and will have long term consequences. Removing this support to food operators at the stroke of a pen is a betrayal of all those who give everything in a high-risk sector.

“It is further evidence, if it was needed, that our Minister for Tourism Shane Ross, TD, has once again failed the hospitality sector, wilfully ignoring the need for regional support beyond the narrow confines of his own constituency.

“As an incentive to stimulate growth and employment the special VAT rate has been a success and provided exceptional return on investment. In removing the 9% rate, the Government have made a grave error that will cost jobs and kill growth,” concludes Mr Cribben.