More than 40% of Dublin food pubs warn they will reduce staff if the lower VAT rate is delayed until 2026, according to a new Licensed Vintners Association survey that highlights the severe impact of higher taxation on the hospitality sector.
The research reveals widespread concern among pub operators, with 10% considering abandoning food service entirely if the reduced VAT rate implementation is postponed. The findings underscore mounting pressure on businesses already struggling with the effects of increased taxation since September 2023.
Over half of Dublin’s food pubs have experienced declining food sales since the higher VAT rate took effect, with approximately 25% reporting sales drops exceeding 10%. About one in twelve pubs in the capital have already stopped serving food completely.
Lunch service has been hardest hit, with 62% of establishments reporting reduced orders. Dessert sales have fallen for 34% of pubs, dinner orders have declined for 28%, and breakfast service has decreased for 22% of operators.
The impact extends beyond sales volumes to menu offerings, with 70% of food pubs forced to reduce their dish selection. Cost pressures have led 52% to eliminate steak from menus, 26% to drop seafood options, and 17% to stop serving roast dishes.
The survey demonstrates overwhelming industry support for immediate action, with 92% of pubs wanting the 9% VAT rate applied from Budget Day rather than waiting until January 2026. Additionally, 96% of Dublin pubs favor making the lower food VAT rate permanent.
The findings highlight the critical timing of government decisions on VAT policy, with potential employment consequences and further menu restrictions threatened if relief measures are delayed.