I welcome the Minister of State to the Seanad this morning. My Commencement matter is about the need for the Minister for Enterprise, Tourism and Employment to make a statement in support of the recent proposals made by the Vintners Federation of Ireland in its pre-budget submission for budget 2027.

I was in the audiovisual room last week where there was standing-room only for the presentation by the Vintners Federation of Ireland to Oireachtas Members. It was looking for support for the businesses its members operate. We heard about the reality and the concerns about the wet bar – I do not really like the term - which refers to the traditional bar – and the pressures these people are under in our communities.

I ask the Government to recognise the vital role wet bars and traditional pubs play in communities across Ireland, and to provide meaningful support to help them to survive. For many people, especially in rural Ireland, the local pub is far more than a business. It is the heart of the community. It is where families and neighbours come together to celebrate life's milestones and support one another through difficult times in events from christenings, to confirmations, 21st birthdays, engagements, weddings, the afters of weddings, anniversaries and gatherings following funerals. To use a phrase I used last week, it is from the cradle to the grave. That is what the rural pub means to the community. It is woven into the fabric of Irish family and community life.

This Saturday, as the Minister of State himself knows, people will be in the local pub down the road watching his home county, Mayo, take on Cork, and my county, Kerry, taking on Tyrone. Next Saturday, rural local pubs will be central to that, yet they are under enormous pressure.

More than 2,200 pubs have closed across Ireland since 2005 and closures continue at an alarming rate. Every pub that closes represents not only a lost business but a lost meeting place, employer and community asset. Currently, publicans face unsustainable business cost increases. Electricity costs have risen by about 70%, wages have risen by 40% and water charges have increased significantly.

While recent VAT measures have helped establishments that serve food, they offer little or no benefit to the majority of small rural wet pubs that do not serve hot food. The on-trade sustainability scheme proposed by the vintners would work by giving pubs financial supports based on the amount of draught products they purchase from suppliers each year. These supports would come in the form of a tax credit, helping publicans offset rises in electricity, wage and utility costs, among others. For example, if a small rural pub in Cork has significant supply costs throughout the year, it could qualify for a tax credit worth several thousand euro. This credit could then be used to reduce its tax bill. If the pub had little or no tax liability, it could be paid out as a direct cash support. The scheme would be capped at €20,000 per annum per pub, ensuring that support would be targeted at small and medium-sized family-run pubs rather than the large operators in the bigger cities.

The Government already recognises the importance of supporting sectors that contribute to Ireland's economy and culture. Our pubs deserve the same recognition. It cannot be right that production companies can receive tax relief for filming in a pub while the pub in question struggles to keep its doors open. If we value vibrant villages, thriving towns, rural tourism, local employment and social connection, which is vital in rural Ireland, we must value and protect our pubs. Once a pub closes, it is often gone forever and the community loses a piece of its identity. I call on the Government to act, to engage with the Vintners Federation of Ireland's proposals and to provide the supports necessary to safeguard these essential community hubs for future generations.

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.

I thank the Minister of State for his reply. It is really encouraging. He said that the proposal merits careful consideration. That is one thing I can take back to the Vintners Federation of Ireland, its members and local families. I grew up in a pub. I have three nephews who are in the pub business. I can see the struggles and the hardship. Every cut goes onto the price of a pint. I will again put this in football terms. Ballymacelligott won the all-Ireland junior club final. There are two pubs in the village. An Ghaeltacht won the intermediate all-Ireland final. There are three pubs in that area. It was all centralised around that. That is where the social inclusion and community elements come in. If those pubs were not there, that element of community would be lost. It is not about major profits in rural Ireland. It is about keeping our culture and our identity through the pub business. I really welcome the Minister of State's comments.

I again thank Senator Kennelly for his contribution on this really important issue. I wish Kerry the very best of luck at the weekend. I know that he, a strong Kerry supporter, will be shouting for Mayo on Saturday. I know he will want us to get the job done. I am sure Senator Eileen Lynch, who is beside him, will have a different opinion on that. She is wearing red today.

To get back to this really important issue, the pub sector and the wider hospitality industry remain a vital part of the Irish economy and the social fabric. We recognise the cost pressures the sector is facing. The proposal from the Vintners Federation of Ireland is very constructive. As I said earlier, it is targeted. It will be given full consideration in advance of the budget. As with any other measure, it will be assessed against the financial, legal and European constraints as part of the budgetary process. I am sure the Minister of Finance will carefully review and analyse this proposal, based on our discussion today and the discussions that will happen over the coming weeks and months, with a view to supporting the sector, which we all want to see grow and thrive into the future.

We now know that Kerry's secret to improving clubs' level of football skills is to get pubs into small villages.

Based on Dublin's performance, there are obviously many closing down.