The drinks and hospitality industry is set to employ 140,000 people in 2022—40,000 fewer than in Q4 2019, the last pre-pandemic quarter, according to new analysis published by the Drinks Industry Group of Ireland (DIGI ).
Among the 40,000 fewer jobs are an estimated 12,700 15–24-year-olds and almost 22,000 women. In counties Roscommon, Galway and Mayo, DIGI estimates 3,730 fewer jobs including 1,190 among 15-24 year olds. 16,700 people are employed in the drinks and hospitality industry in the West. This is despite the broader economy’s ongoing recovery as the country approaches full vaccination.
DIGI's estimates are based on analysis of the latest industry employment report, Structure and Performance of National and Regional Employment in the Hospitality Sector of Restaurants, Hotels and Public Houses, researched and authored by DCU economist Anthony Foley. Foley’s report shows that the accommodation and food service sector, which includes most drinks and hospitality businesses, employed almost 180,000 people in the last quarter of 2019.
However, DIGI predicts that the likely substitution of some staycation demand with overseas sun holidays, some element of consumer reluctance, and the overall weaker national and international demand for travel and tourism—which in Ireland heavily involves drinks and hospitality businesses—means some pubs, restaurants, and hotels will not return to their pre-pandemic employment levels in 2022.
In response, DIGI has called for the Government to reduce Ireland’s excise tax rate, which is the second highest overall in Europe, by 7.5% in October’s Budget.
"Ireland’s high rate of excise, which represents a significant cost, is forcing drinks and hospitality businesses to make growth-limiting sacrifices," said Liam Reid, Chair of DIGI and Corporate Relations Director at Diageo Ireland.
"At such a precarious time for the industry, every euro matters. Money taken by the Government in excise tax is money that could be spent by pubs, hotels, and restaurants on recovery and investment.
"A 7.5% reduction in excise tax would have an immediate impact and mean more money for businesses to weather what is likely to be a difficult year and, potentially, maintain current staffing levels, hire new staff, invest in premises, and improve product and service offerings to the benefit of domestic and international consumers. Crucially, it will greatly support the industry to maintain the predicted 140,000 jobs."
DIGI believes that it should be the Government and industry’s ‘collective goal’ to return to the Q4 2019 total of 180,000 drinks and hospitality jobs ‘as quickly as possible’ in 2022.
"Only by making it easier for the drinks and hospitality industry to do business can Ireland avoid a two-tier recovery, where work-from-home multinationals and professional services companies emerge from the pandemic relatively unscathed, even better off, and the most important domestic industries are left struggling," said Mr Reid.
"Ireland has the highest excise on wine, the second highest on beer, and the third highest on spirits, despite us producing some of the world's most famous drinks products and the importance of drinks and hospitality businesses to Irish tourism.
"In high-income European countries like France, Germany, Spain, and Italy, where drinks and hospitality businesses are equally important to international exports and tourism, excise tax is significantly lower. For example, a pint of beer served in a German bar is levied with just 5 cents of excise compared to 55 cents in Ireland. In France, a glass of wine has an excise tax of just 1 cent, and in Italy and Spain zero.
"In Italy, excise tax on a 70cl bottle of Irish whiskey, which is €2.90, is lower than the excise tax on a bottle of Irish whiskey produced and sold in Ireland, where it is €11.92.
"Lowering excise tax on drinks products by 7.5% requires no new legislation or EU approval. The Government can do it quite literally overnight, with overnight benefits for drinks and hospitality business owners and their employees."