Cost of Living Issues
Seanad Éireann — 2026-06-25
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Alan Dillon (FG), Mayo

I thank Senator Kennelly for raising this really important issue. I am very conscious of the significant pressures that pubs and the wider hospitality sector are facing, particularly in recent years as the result of rising costs across energy, labour, insurance and compliance. We need to be clear that the Government fully recognises the importance of the pub sector and specifically its social and cultural importance to communities right across Ireland rather than just its economic importance.
I am aware of the proposal made by the Vintners Federation of Ireland to introduce a tax credit to support the on-trade sector, which would be linked to the supply of draught products. It merits careful consideration. It is my understanding that the proposed scheme would provide a tax credit of €20 for every 50 litre keg of draught beer and cider, based on verified purchases from the previous year and capped at €20,000 per premises per year. I further understand that the intention is to support smaller pubs in particular.
With regard to the specifics, I understand that this is a proposal that will be advanced in the preparation of the upcoming budget. However, I am cognisant that the measure would need to be considered in light of the available fiscal parameters for budget 2027 and the wider range of priorities for the budget. It is my understanding that the Vintners Federation of Ireland has estimated the cost of the proposed scheme to be in the region of €75 million annually. The measure would also need to be considered with reference to the Department of Finance's tax expenditure guidelines, which provide for the evaluation of tax expenditures, including tax credits, to give consideration as to when these are best used.
As the Tánaiste and Minister for Finance has stated previously, this measure would need to be considered in line with the alcohol structures directive, which provides for a harmonised framework for the taxation of alcohol across the EU. The Tánaiste has stated that it is unclear whether the proposed on-trade sustainability scheme would be permissible under that directive if its effect, in practice, would be to give relief from the rate of excise duty paid on alcohol products. The directive does not allow for differentiated excise duty rates between the on-trade and off-trade sectors. This means that Ireland cannot apply reduced excise duty rates to alcohol sold in pubs, restaurants or other licensed premises. Any changes to alcohol excise duty must make no distinction as to the point of sale. As this is a targeted tax measure, from an EU state aid perspective, consideration would need to be given as to whether it would be compliant with state aid rules. Ultimately, I also note that any changes to tax policy as part of the budget are a matter for the Minister for Finance.
I accept the importance of small pubs in rural Ireland and their significant decline over recent years. They remain a real focal point for communities, providing a social environment where people can engage and find a bit of belonging and connectivity. I thank the Senator for raising this important matter.

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Record URI: https://data.oireachtas.ie/akn/ie/debateRecord/seanad/2026-06-25/debate/main
Retrieved: 2026-08-14T04:55:07+00:00
Sitting date: 2026-06-25