Joint Committee on Enterprise, Tourism and Employment debate

Competitiveness and the Cost of Doing Business in Ireland: Discussion (Resumed)

An Cathaoirleach

Before we proceed, I have a few housekeeping matters to go through. I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards references that witnesses make to other persons in their evidence. Witnesses attending today's committee are protected by absolute privilege in respect of the presentation they make to the committee. This means that they have absolute defence against any defamation actions for anything they say at the meeting. However, they are expected not to abuse this privilege. It is my duty as Chair to ensure that this privilege is not abused. Therefore, if witnesses' statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

I advise members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings. I will not permit a member to participate if they are not adhering to this constitutional requirement. Therefore, a member who attempts to participate from outside the parliamentary precincts will be asked to leave this meeting. In this regard, I ask any member partaking via Microsoft Teams to confirm they are on the grounds of the Leinster House campus.

Members and witnesses are reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or entity by name or in such a way to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity they will be directed to discontinue their remarks, and it is imperative they comply with any such direction.

I propose that we publish the opening statements and submissions provided by the witnesses on the committee website. Is that agreed? Agreed.

With regard to speaking arrangements, witnesses will be invited to speak for approximately ten minutes. I will then allow members to ask questions and make comments for approximately seven minutes. We will have a second round of questioning if time permits, when members will be allowed to ask questions or make comments for approximately four minutes. Members may be called as they appear on the week 2 speaking rota, which was circulated before the meeting. Committee members may substitute within their parties or groups. Non-members or substitutes may only speak after committee members or substitutes have spoken. Are these arrangements satisfactory and agreed? Agreed.

The minutes of the meetings of 26 May, 27 May and 9 June were circulated and approved in private session. Are those minutes agreed? Agreed.

The items on today's agenda are competitiveness and the cost of doing business in Ireland and views on budget 2027. The committee has decided to invite witnesses here to talk about these issues.

I welcome our witnesses here today. We have the following stakeholders: from the Irish Road Haulage Association, Mr. Ger Hyland, president, and Ms Sandra Dennehy, vice president; from the Licensed Vintners Association, Mr. Donall O'Keeffe, chief executive; from the Restaurants Association of Ireland, Mr. Adrian Cummins, chief executive, Ms Eimear Killian, vice president, Mr. Liam Hayes, public affairs and communications executive, and Mr. Paul Lenehan, past president; and from the Vintners Federation of Ireland, Mr. Pat Crotty, chief executive officer and Mr. Michael O'Donovan, president. They are all most welcome and I thank them for being here. I invite Mr. Hyland of the Irish Road Haulage Association to make his opening statement.1

Mr. Ger Hyland

I am grateful for the invitation to appear before the committee today on behalf of the Irish Road Haulage Association. The IRHA represents road transport operators throughout Ireland, ranging from small family-owned businesses to large national logistics providers. Our members move over 95% of all goods transported within the State and form a critical part of every supply chain serving Irish consumers, businesses, exporters and manufacturers. Road transport is often described as the economy's hidden essential service. When haulage works efficiently, shelves are stocked, factories receive inputs, exporters reach ports and consumers receive goods. When the sector comes under pressure, the effects are felt throughout the wider economy.

Today, the Irish haulage industry faces a combination of challenges that are significantly undermining competitiveness and increasing the cost of doing business. The industry continues to experience sustained cost inflation across virtually every aspect of operations. Labour costs have increased substantially in recent years, fuel remains volatile, insurance premiums remain high, vehicle purchase costs have risen sharply, and operators continue to absorb increasing regulatory and compliance costs. In addition, toll charges, road user charges and a growing range of environmental and administrative obligations are placing further pressure on operators, particularly SMEs which make up the majority of our sector. Unlike many sectors, road haulage often operates on very tight margins and has limited ability to pass increased costs through the supply chain. As a result, many operators are experiencing significant financial pressure despite maintaining high service levels.

One of the most serious challenges facing the industry remains the shortage of professional HGV drivers. The average age of drivers continues to rise, and recruitment of younger entrants remains difficult. While industry initiatives are helping to promote the profession, domestic supply alone is not sufficient to meet current and future demand. To address this effectively, we must develop a permit-to-drive system that operates efficiently and without unnecessary delays or bottlenecks, including the 50:50 rule that is in place for HGV driver permit workers. This should include a one-stop-shop approach for HGV drivers, bringing together all relevant departments and agencies involved in the journey from obtaining a learner permit through to driver testing and the issuing of a full driving licence. At the same time, we must continue to support and strengthen the work of the logistics and supply chain skills group to promote the haulage and freight sector as an attractive, rewarding, and long-term career choice. The IRHA also recommends that we continue our partnership with our education and training boards to develop a co-ordinated national approach across all ETBs to recruit young people into the profession of HGV driver and develop a sustainable indigenous workforce. This requires creating a streamlined pathway into the profession of HGV driver that supports the recruitment of drivers from car licence to HGV qualification and can access training and testing in a timely and efficient manner, free from unnecessary delays. Without access to sufficient drivers, supply chains become less efficient, costs increase and economic growth is constrained.

Ireland is a peripheral nation and island economy that depends heavily on efficient logistics and transport links and must be considered in the context of the additional structural costs associated with being an island nation on the periphery of Europe. While investment in critical infrastructure is necessary, the cumulative impact of these additional costs risks undermining Ireland’s competitiveness and increasing the cost of doing business across the economy.

The recent introduction of additional infrastructure-related charges to end users, such as the recent €15 charge at Dublin Port, places further financial pressure on businesses that rely on efficient freight movement. Irish businesses are heavily reliant on roll-on, roll-off ferry services and port infrastructure to access European and global markets, creating unavoidable transport and logistics costs that competitors in mainland Europe do not face. These challenges are compounded by operational inefficiencies within the port system, including inflexible depot operating arrangements, restricted staff and union-driven working practices and poor alignment between empty container returns and full container collections. The resulting delays frequently lead to additional demurrage, detention and customs-related charges. We also encourage continued investment in secure truck parking facilities, freight-focused infrastructure and measures that support the transition to lower-emission vehicle technologies.

The haulage industry is committed to supporting Ireland's climate objectives. However, the transition to low and zero-emission heavy goods vehicles presents particular challenges. Vehicle costs remain significantly higher than conventional diesel alternatives, charging infrastructure remains limited and the business case for investment remains difficult for many operators. The sector requires a realistic and properly funded transition pathway that recognises operational realities and supports businesses through the change, including diesel alternatives.

In advance of the next budget in October, the IRHA urges Government to prioritise the retention of the measures introduced to help address high fuel and other operating costs. These measures were introduced to assist with high fuel and operating costs and were a recent recognition that our sector has been overtaxed across a range of taxation headings. The fundamentals justifying the introduction of these measures have not changed and we need to see them included as specific proposals in the next budget. We need to see real and substantive progress on a just transition scheme for the licensed haulage sector which addresses current discrepancies in the taxation regime dealing with HVO and biofuels. Our budget submission proposes two targeted fiscal measures to support decarbonisation while maintaining competitiveness and which can be applied within the current DRS scheme. These measures will support and promote an accelerated adoption of HVO and biofuels as the only immediately scalable pathway for HGVs.

While our requests are non-budgetary measures, we believe they should be addressed by Government in the run-up to the budget. They include measures to address driver shortages, including greater flexibility within the employment permit process for the transport sector; enhanced support for skills development and driver training; continued investment in strategic road and freight infrastructure; measures to improve the competitiveness of SMEs facing rising operational costs; a commitment to ensuring that new regulatory obligations are accompanied by proportionate implementation costs and timelines.

Ireland's economic success depends on efficient and competitive logistics. The road haulage industry does not seek special treatment. Rather, we seek recognition that a resilient and competitive road haulage sector is essential to the functioning of the wider economy. By addressing the challenges faced by the sector, including increasing costs, barriers to decarbonisation, labour shortages, supporting competitiveness and investing in infrastructure, Government can strengthen supply chains, reduce costs for consumers and businesses, and support sustainable economic growth. I thank members for their attention and I look forward to answering questions.

Mr. Donall O'Keeffe

I thank the Chair and members for the opportunity to appear before the committee today to address a critical issue for the licensed trade: competitiveness and the cost of doing business in Ireland. I acknowledge the Government’s support for the hospitality sector, including pubs that serve food, with the reintroduction of VAT of 9% on food from 1 July next. This is a critical measure and is vital to the sustainability of food businesses right across the country. VAT at 9% is also the right rate from the perspective of the competitiveness of our international tourism offer.

The licensed trade business environment has been severely challenged over the longer term, as evidenced by a drop of one third in per capita alcohol consumption since 2001. Ireland is now in the middle of the EU average of per capita alcohol consumption. Some 2,200 pubs have closed since 2005, a decline of one quarter. There is very high excise and VAT on alcohol compared to EU levels. There have been significant increases in business costs over time, squeezing margins and driving prices higher. The economic outlook is characterised by huge geopolitical uncertainty, likely higher inflation and higher interest rates, combined with slowing growth.

I will set out our position on some of the key competitiveness and business cost challenges, focusing on issues and policy responses within the Government’s control. The licensed trade priorities are, first, labour costs. We appreciate that the minimum wage applies economy-wide, but it is the single most important Government labour policy impacting pubs, given the labour-intensive and service nature of our industry. As a service industry, labour costs are particularly important to our financial sustainability. Drink-only pubs have a labour to net turnover ratio of 22% to 25% while pubs with substantial food operations could have a ratio of 32% to 37% so the minimum wage level and its increase is critical to pubs. Government policy, in setting the level of the national minimum wage, is a direct driver of overall labour costs in the licensed trade. The level of increase in the minimum wage drives the total wage bill in the licensed trade, as all other workers seek similar pro rata increases. Post Covid, the minimum wage has increased from January 2022 to January 2026 by 35%. Inflation over the same period, per the CSO, was 17%. It is simply unsustainable for the minimum wage to be running at double the rate of general inflation, as this is directly challenging business viability, a fact confirmed by the rate of pub closures nationally. Our policy ask is that budget 2027 must set the increase in minimum wage for 2027 at the general inflation rate for this year, at a maximum of 3.5%.

This has to be seen in the context of other employer labour costs also increasing. Pension auto-enrolment was introduced in January, adding 1.5% to labour bills. Employer’s PRSI is scheduled to increase again, and to move from 8.9% in 2024 to 9.3% by 2027. Statutory sick pay must be maintained at current levels for the next three years. It should be noted that pubs are obliged to bring in direct replacements for sick staff, thereby adding to total labour costs to cover for absent workers. Our policy ask is for budget 2027 to pause employer’s PRSI at current rates to limit increases of employing staff at a time of uncertainty and a deteriorating growth outlook.

Licensing costs, in particular late trading licences, are an issue. A special exemption order costs €205 per night for two additional hours trading. This amounts to €32,000 a year for a bar operating late three nights a week, with solicitors' fees in addition. It is extortionate. Our policy ask in the short term is for budget 2027 to reduce the cost of special exemption orders to €100 per night, but, in the longer term, as included in the programme for Government, the sale of alcohol Bill be enacted as a priority. This includes provision for an annual late bar permit, the scrapping of the SEO system and an annual nightclub licence, which is required for our capital city.

While very welcome for the wider hospitality and food sectors, the reintroduction of VAT of 9% is of no benefit to pubs that do not serve food, which is the majority of pubs in Ireland. Ireland has one of the highest rates of alcohol excise across the EU and UK, despite our per capita consumption having fallen to the EU average. Such high excise rates are damaging to the competitiveness of the licensed trade, especially when VAT of 23% is added for alcohol. Our policy ask is that in budget 2027, alcohol excise should be cut by 10% across all categories of alcohol to boost the commercial viability of the licensed trade.

On economy-wide policy priorities, we await the publication of the cost of business forum’s report and trust the Government will implement its recommendations with urgency. A strategic perspective on reducing costs is required. Of specific relevance to our sector are costs relating to energy. Pubs are intensive users of both electricity and gas, with bills rising by between 45% and 50% on electricity and gas since summer 2001. Insurance is a significant cost for pubs, with the average Dublin pub paying well over €30,000 annually. Large late bars could be paying €100,000 per annum. We welcome the Government reforms delivered to date and note there are fewer liability claims and reduced awards in lower value injury claims. However, the Central Bank’s report shows that business premiums are almost a quarter higher than in 2020. Essentially, businesses are not seeing the savings promised by the Government reforms, while insurer profits and legal costs continue to increase. Government reforms must focus on delivering premium reductions for businesses.

Taxi availability is an issue. It is a shocking statistic that the number of taxi drivers has fallen by 20% nationally since 2012, despite the growth in population, expansion in the economy and increase in tourism. The shortage of taxis is particularly damaging for the night-time economy and is especially severe in rural areas. Our policy ask is that, in line with the recent recommendations of the Competition and Consumer Protection Commission, taxi regulations be amended to increase taxi supply, allow part-time drivers to use their own cars and expand the use of ride-hailing apps as they apply internationally.

Finally, there are Dublin-specific policy priorities. The first is the removal of the Dublin airport cap. Long promised by Government, this should be an immediate and urgent policy priority to facilitate the competitiveness and growth of both our capital city and the national economy. The second is the Dublin task force. Progress on this has been glacial but we trust that the interim advisory board, which had its inaugural meeting this week, will bring a renewed focus and urgency to implementing the task force’s recommendations. Our policy ask is that budget 2027 provides the dedicated, specific financial resources to commence the essential investment programme to renew and revitalise our city centre. The provision of the much-promised 1,000 extra gardaí for Dublin must be an urgent priority for Government.

Government policy is a huge driver of the costs of doing business in the licensed trade. Given the increasingly uncertain economic outlook, with higher inflation, higher interest rates and slower growth all forecast for the coming year, budget 2027 must prioritise the competitiveness of domestic SMEs and put a strategic focus on reducing the costs of business. I thank members for their attention and welcome any questions they may have.

An Cathaoirleach

I thank Mr. O'Keeffe. I call Mr. Cummins to make his opening statement.

Mr. Adrian Cummins

I thank the Chairman and members of the committee for their invitation to appear before them today on behalf of the Restaurants Association of Ireland. I am joined by Eimear Killian, vice-president; Paul Lenehan, past president; and Liam Hayes, public affairs and communications executive.

Ireland's food-led hospitality sector has been one of the country's most resilient and culturally important sectors. Through economic downturns, rising inflation and a global pandemic, restaurants, cafés, gastropubs and food-led businesses across Ireland have continued to serve their communities, employ local people and contribute to economic activity in every county.

Our sector is central to Ireland's tourism offering. Visitors come to Ireland not only for our landscapes and heritage, but for our renowned hospitality, our food experiences and our famous céad míle fáilte. Restaurants, cafés, gastropubs and food producers play a vital role in showcasing Irish produce, supporting local supply chains and strengthening Ireland's reputation as a world-class tourism destination.

Food tourism is a growing driver of the visitor economy and a major opportunity for regional development. Hospitality businesses across Ireland deliver authentic visitor experiences while supporting local economies. With 34% of tourist spending going on food and drink, its importance has been recognised in the new national strategy for tourism, with a dedicated culinary tourism strategy set to follow.

want to acknowledge and thank the Government, Members of the Oireachtas and all those who supported the restoration of the 9% VAT rate for food-led hospitality businesses. This is a significant and welcome decision. The return of the 9% VAT rate from 1 July on a permanent basis represents an important recognition of the pressures facing the sector and the strategic importance of hospitality to employment, tourism and regional Ireland. It is also important to address a point that is often overlooked in discussions around the hospitality sector. The sector is overwhelmingly made up of small and medium-sized enterprises, with 99.6% of hospitality businesses in Ireland being SMEs. Of the 20,213 hospitality businesses operating across the country, only 73 are classified as large enterprises. When we talk about the 9% VAT rate, we are talking about supporting local family-run businesses. We are talking about the café on our main streets, the restaurant employing local people in our towns and the pub serving food at the heart of a rural community. These are the businesses that benefit from measures that improve viability and competitiveness. These are the businesses that create local employment, support local suppliers and help sustain vibrant town centres and communities throughout Ireland. However, challenges remain.

Two key issues facing food-led hospitality businesses today are labour costs and cumulative business costs. The challenge is that labour-intensive businesses are facing an ever-increasing accumulation of costs. Rising wage costs, increases in employers' PRSI, energy costs, food inflation, insurance premiums and growing regulatory obligations are collectively placing enormous pressure on viability. Recent RAI survey data found that 91% of businesses believe rising labour costs are threatening business viability, 75% have reduced or expect to reduce staff hours and more than half of businesses now report labour costs exceeding 40% of turnover. The impact is unfortunately already visible.

Recent CSO figures show employment across restaurants, cafés, pubs and food service businesses fell from approximately 136,000 to 116,000 in a year, representing a decline of almost 15%. Across the country, businesses have reduced trading hours, closing on quieter days and delaying investment decisions. They are not doing this because demand has disappeared. They are doing it because the cumulative cost of doing business has reached a point where viability is under pressure.

We welcome the establishment of the cost of doing business forum, on which the RAI is represented. The success of the forum will ultimately be judged not by the reports it produces, but by the implementation of its recommendations. The work has been done. The challenge now is delivery.

As the Government prepares budget 2027, we believe competitiveness must remain at the centre of the decision-making process. In particular, we are calling for future national minimum wage increases to be linked to the consumer price index, the introduction of a no-tax policy on customer tips and gratuities, a more practical application of benefit-in-kind rules relating to staff meals and corporate hospitality, targeted action on employers' PRSI for labour-intensive SMEs, as set out in the programme for Government, and continued support for culinary tourism.

We also want to see increased investment in hospitality skills, apprenticeships and workforce development, alongside reform of employment permit rules to help address ongoing recruitment and retention challenges across the sector. Regarding apprenticeships, we would like to see a level playing pitch in respect of craft apprenticeships and the new apprenticeships in terms of the supports not just for apprentices, but also for the business owners.

Finally, we support the Vintners' Federation of Ireland's proposal for an on-trade sustainability scheme. We are also asking for a reduction in excise duty, which is one of the highest in Europe. Regarding transport, we would like to see a move on the taxi availability for our sector, more taxis in rural areas, if possible, and pilot schemes to be developed through budget 2027.

Ireland needs a strong hospitality sector. It is a major employer, a key tourism asset and an essential part of community life in every county. The objective should be to create an environment where businesses can invest, expand trading hours, employ more people and remain viable for the long term. I thank committee members and look forward to their questions.

An Cathaoirleach

I thank Mr. Cummins. I call Mr. Crotty to make his opening statement.

Mr. Pat Crotty

I thank the Cathaoirleach and members for the invitation to appear before the committee today. We appreciate it.

Local pubs act as social and cultural hubs at the centre of our towns and villages. They support the economic and social sustainability of our local communities. They generate employment and attract tourism. They host community events and provide an important place where people can socialise.

The pub contributes to social well-being and connectedness, and, in many rural communities, the pub is one of the last, if not the last, remaining indoor public gathering place. We are here today to talk about the future of a business typology that is, in fact, more than just a business. When we talk about the future of the rural pub, we are talking about the survival of critical social and cultural infrastructure in communities right across the State.

At the heart of the threat to the Irish pub is the topic this committee is currently focused on, namely, competitiveness and the cost of business. Pubs, particularly smaller, rural pubs, continue to face a crippling cost base that is posing an existential threat to their ongoing commercial survival. In the statement circulated, I have included a short table setting out the average cost increases of significant items that our members have reported over the past five years. They are CSO matched.

Electricity has had very significant increases and, indeed, there are Government fingerprints on that. Wages are entirely Government fingerprinted. Everyone gets pay increases but the migration from minimum wage to living wage has put significant pressure on hospitality businesses, which are the main employers of people who were previously on minimum wage.

Water is another Government-related item that has had very significant changes with a 30% increase in October 2024 and an additional 10% in October 2025. These increases have come on top of the general range of rising supplier costs, insurance premiums, and other cost drivers. Our members are telling us they simply have no capacity left to absorb any further cost increases. They are already leading to job losses.

Recent CSO data shows that employment in the food and beverage service sector declined by almost 15% in the past year. Findings from a new VFI member survey confirmed this. It found that 22% of pubs reported a decrease in staffing levels over the previous 12 months.

The survey also found that 65% of publicans believed rising business costs are having an unsustainable impact on their operations, while 41% reported that trading conditions are in fact worse than they were 12 months ago. Confidence in the future outlook is also weakening, with almost 42% expressing a lack of confidence in the future sustainability of their businesses.

More critically, pubs are closing. One of the starkest indicators of the challenges facing pubs is the decline in the number of pubs across the State. According to data from the Revenue Commissioners, more than 2,200 pubs have closed since 2005, a decline of 25% in the total number of licensed pubs. More concerning still is that the rate of closure is accelerating. While the average annual rate of closure over the past 20 years stood at 112 pubs per annum, that figure increased to 128 closures annually when averaged over the past five years, pointing to an increasing rate of market failure within the sector. Against this backdrop, the VFI believes there is a strong case for targeted intervention to support the competitiveness of pubs, particularly in rural Ireland.

We welcome measures introduced to support parts of the hospitality sector, including the restoration of the 9% VAT rate for food services. This is a recognition by the Government of its responsibility to support the sector. However, as 65% of our members do not serve hot food, another form of support is required. For that reason, the VFI has proposed a new on-trade sustainability scheme for consideration in budget 2027.

The proposal is based on a tax credit model already used by the Government in sectors such as film and television production, digital gaming and unscripted television production. Pubs would qualify for a tax credit based on verified purchases of draught products, capped at €20,000 per premises per annum. The credit could be offset against tax liabilities or provided as a cash payment where tax liabilities are insufficient. The proposal is specifically designed to support smaller pubs. Indeed, 50% of pubs would not qualify for the maximum support but even half that, €10,000, would be a very significant tonic to small rural pubs. It is important to note that our proposals are fully compliant with the EU alcohol structures directive as the credit would not be linked to or offset against excise payments. We acknowledge the constructive engagement of the Department of Finance regarding previous proposals and have developed this proposal to address its concerns.

The Irish pub is recognised around the world as an important part of our national identity, but for those of us who live and work in communities throughout Ireland it is also something more personal. It is a local employer. It is a community hub. It is where we go to meet our friends and family. If the Government values pubs as community infrastructure, tax policy should reflect that. We ask for the committee's support for our proposal ahead of budget 2027. We support the detailed commentary by our colleague associations here today and we are happy to answer any questions members have.

An Cathaoirleach

Thank you, Mr. Crotty. That concludes the opening statements for today's meeting. We now go over to members. The first slot will be Sinn Féin's, followed by a Fianna Fáil slot. We will go then to whoever is here. I call Deputy Rose Conway-Walsh.

If it is a group that owns a number of pubs, it is one company. From what we have been advised, it would be more costly to try to create and to administer the exceptions than to just do the thing as it works and pay the money. It will come back anyway.

Deputy Rose Conway-Walsh

It would be useful, even for the vintners, to do a bit more digging deeper into it rather than there being a vast range, many or whatever. It would be really helpful if we could close in on the exact cost.

Turning to excise, it is something like 55 cent on a pint of beer where in Germany it is down 5 cent. With wine, it is 80 cent versus 1 cent in France. There is all of that. I could see excise and tax being introduced as a behavioural tax when there was a very high alcohol consumption in this country, but the witnesses are saying that the consumption of alcohol has now reduced, so there is no need for the behavioural element. It is simply a revenue-raising exercise. Will the witnesses talk to me about the excise? What would be the aggregate cost of reducing the excise?

Mr. Donall O'Keeffe

First, excise is not in any way related to health measures. It is a straight revenue-raising tax and there is no public health element to it. Revenue regards it as a tax on alcohol – full stop.

Second, along with the UK and the Nordics, alcohol excise in Ireland is by far the highest in Europe and substantially ahead of the averages. For more than 30 years we have had the highest excises on alcohol in the EU.

Deputy Rose Conway-Walsh

What is it in the UK again?

Mr. Donall O'Keeffe

It is a broadly similar level. It is a fraction higher depending on the category.

Deputy Rose Conway-Walsh

To Ireland – to the South.

Mr. Donall O'Keeffe

Yes. In simple terms, Ireland, the UK and the Nordics are a mile ahead of the mainstream European market. The examples the Deputy quoted are right. Beer is a very important industry in Germany. It supports its domestic brewers and domestic pubs by having 5 cent a pint excise tax on beer. Beer is a big industry in Ireland - it is integral to the Irish pub offer - and we tax it very heavily at 55 cent a pint. We pay tax on tax, with 23% VAT on top of that 55 cent, meaning that, in round figures, 30% of every drink we serve goes to the Government in tax. The sector is extremely heavily taxed.

On the Deputy’s point about excise being a behavioural mechanism, the Department of Finance never saw it as that. It always saw it as a straight revenue-raising measure. Since 2001, per capita consumption has fallen by 30% - we are now back at EU levels - and at the same time, we have seen 2,200 pubs close and the supermarkets and multiple retailers-----

An Cathaoirleach

Sorry, but we are over time.

Deputy Rose Conway-Walsh

I am over time. Just the overall cost.

Mr. Donall O'Keeffe

A 10% excise reduction across all three categories-----

An Cathaoirleach

I am so sorry. I have to be careful with time. There is an absence of people in the room but there is a vote in the Seanad as well and hopefully the Senator will rejoin us. I have to be careful. The next slot is Fianna Fáil, so Deputy McCormack, and then I will go to Deputy Brian Brennan.

Deputy Tony McCormack

I thank everyone for coming in today. If we listen to everyone, we hear a story of rising costs and the damage that is doing to their businesses. The businesses they represent are, in many cases, the fabric of our community. Mr. Crotty spoke about the local pub being the social hub. For many people in rural areas, it is probably the only contact with other people on a weekly basis, be that going to a meeting, playing cards or having a drink and a chat. It becomes a huge part of the community. There is something I am hearing from everybody here. That includes Mr. Hyland, when he talks about the work being done by the hauliers in bringing goods to shops across the country, whether supermarkets or the smaller retail stores, as well as bringing goods to foreign directive investment, FDI, firms, whether bringing raw materials into the companies or picking up finished products for export or distribution around the country. It also includes the Restaurant Association, whose members provide services in communities, be those for people just going out for a meal or for weddings, christenings, funerals or whatever. They are all very much part of the fabric of our society and a huge part of our communities but the story I am hearing from them is not a good story. It is probably one replicated across Europe because of the increased costs due to the war in Ukraine, first, and now the war in Iran, which has restricted the flow of oil through the Strait of Hormuz.

My question is where do we go from here. Mr. Hyland spoke about getting away from the costs aspect of it and looking at the future of the haulage industry across the country. He mentioned a problem attracting new members into the business. In his opening statement, he mentioned ETBs and the courses they ran. How do we make it more attractive for young people to decide they want to go that way? Looking at a lot of service industry businesses, local Irish people do not want to get involved. It seems like it is not good enough for them. How do we make it attractive for them to want to get involved?

Mr. Ger Hyland

Of the transport fraternity in Ireland, 77% of the companies are rural based. They are the one-to-five truck guys. They are all employing people in rural Ireland. Our problem is that our industry has been struggling for a number of years. It was a low-pay industry. That has all changed now. There is a very good profession there for any young person, whether a lady or a gent, to come into our industry.

A lot of our smaller companies are being swallowed up by the bigger companies now. On getting a young person involved in transport, there is a certain cohort of young people in country areas, especially where I live. I have three trainees who I took on when they left school. I gave them jobs in the warehouse and around the yard. I put them through their car tests and their van tests; I paid for their lessons and their tests. They are now doing truck lessons. It is costing me an arm and a leg. I do not mind paying that type of money - they are neighbours’ children who are going to get a decent chance in life and going to get a profession – but my problem is that it is taking me over two years from the time I bring them into my yard until I have them trained to be a truck driver. The biggest obstacle to my business is the Road Safety Authority, RSA, and the length of time it is taking a young person to get a test in this country. If they are lucky enough to pass their test first time, it will take up to two years from the day they come into my employment until the day they have their commercial licence in their hand. The day they get their commercial licence, they are told that the RSA will call them back in 12 to 14 weeks when it gets around to it and they can do a walkaround check. That walkaround check consists of showing an instructor where water and oil goes into a truck, how you check the lights and how you check the tyres.

Deputy Tony McCormack

I am not cutting off Mr. Hyland, but we only have a limited time. I hear his story. What he is saying is that the RSA needs to tidy up what it is doing in order to make it easier for him. He is saying it takes two years. If I went out in the morning and decided I wanted to start driving a truck and organised lessons, say with Hynes Driving School in Tullamore, it would take two years from the time I started with them until I could drive on the road. Is that right?

Mr. Ger Hyland

If the Deputy was lucky enough to pass his test first time.

Deputy Tony McCormack

It sounds ludicrous from where I am sitting that something like that would be dragged out over a long period. It is not like an apprenticeship where you go into a job and work and earn a decent wage. A normal person will have to go in, do the lessons, do the test and then do the walkaround test after that, which sounds ludicrous.

In his opening statement, Mr. O’Keeffe mentioned the reduction in alcohol consumption.

That is a good thing in ways because there was a lot of abuse here, but is there any factor underlying this reduction or is it just that people nowadays want to live healthier lives and there is less abuse of alcohol?

Mr. Donall O'Keeffe

It is clear there is a very big change demographically. The younger generations are simply drinking less alcohol and there are a number of reasons for that. There is growing health-consciousness. They are getting up earlier, working harder, going later and commuting longer. They are choosing to spend money on alternative social things, whether that is running clubs, Hyrox or travel. They have loads of options. They are still coming to the pub, which is great, but it is really around events. When there is a match, a concert, a party or an office event they are in but the regular drinking previous generations did, especially early in the week, is dying off. Clearly, there is an issue with illicit drug use as well. That is in every village, town and city in the country too.

We remain very optimistic about the future of the pub in Dublin. We have a product that is just fantastic. It is integral to our tourism offer and to our local communities. Everybody, when they think of Dublin pubs, thinks about Dublin 2 and Temple Bar where there are some very large, very successful businesses but in suburbs up and down Dublin there are regular family pubs doing a local trade with local customers and local staff. We have to live with that decline in alcohol consumption. It is driven by a whole pile of factors beyond our control. Our job is to have an offer that is good enough to attract customers in and one of the things we are saying is our costs are being driven very aggressively by government policy, especially on labour and alcohol taxation.

Deputy Tony McCormack

I thank the witnesses. I have more questions but I will wait until the end.

Deputy Brian Brennan

I apologise as I am caught between two committees. The GAA is in next door.

I had skin in the game. I was born and reared in a pub. My father had a pub in Westmeath in a little village called Dysart. Then we went on to Gorey. I got into the hotel game and expanded into the great city of Kilkenny. I ended up paying 600 people every Thursday. I remember I was at a debate on RTÉ with a colleague at the time I first put my toe into politics. He said he was the only one with political experience but I felt I had business experience. What I am hearing this morning is frightening. It really is. I fear for all trades involved. I often say it does not matter what you do, if you do not make a margin you are absolutely at nothing. That goes for Mr. Hyland's business, Mr. Cummins's, Mr. Crotty's and Mr. O'Keeffe's. That is the key. What is being eroded here is the margin.

I will start with hospitality. If you looked at any other business sector and a quarter of the businesses closed in the last 11 years there would be a national emergency. Let us discuss the pub. We have discussed prices, labour costs and everything but a key factor is the social fabric of every town and village, with due respect to Dublin. I have mentioned before that I had a case of a neighbour of mine whose child was very quiet in school and very introverted. They sent the child into a pub that was doing food for one summer and that child was changed. You cannot put a price on that. You cannot put a price on driving through a village and seeing a pub closed. The dereliction affects confidence in that village. I totally understand where Deputy Conway-Walsh is coming to in relation to drink and the amount of investment we are looking for on it but having been in the hospitality business it is far healthier to drink in a pub than to be drinking large whiskeys in front of a fire and a television. The onus is on us as a Government to keep as many pubs open as possible. That is something we should support. I read the report in relation to this figure of €20,000 but I feel it should be turnover-related. To contradict myself on that, I had a meeting lately with a fast food chain that has a business on Grafton Street and one in Arklow. The turnover is six times more on Grafton Street than it is in Arklow and could be up to 12 times more in busy periods, but the chain is making more money in Arklow, mainly because of security and the famous costs. It is all about the margin when he sits down at the end of the month. I am of the strong opinion that we have to provide support.

Turning to Mr. Hyland, when I was elected I made a promise to visit three different things. The first was GAA and all sporting clubs, which are such a huge part of the community. The second was schools and the third was businesses. One Monday I drove down to a place called JC Breen. It is literally on a crossroads in the middle of the Harrow, Monagear and Boleyvogue just outside Ferns in Wexford. JC, Lord have mercy on him, died too young. He started with one truck and now there are 60 trucks and 100 people working down there. His son Nick took it on. His lieutenant, as I call him, William Cullen is there. They tick everything that is right about Ireland. They are working and living in their communities. However, I got into the car and I worried whether they were doing it for the love of the business or were they actually making money, because they were being hammered with costs. Tolls are part of it. It goes back to margins again.

Turning to Mr. Cummins, how can we reverse what is going on? That is what we have to take out of this meeting. I would like to give the last minute to Mr. Hyland to come back on how we can reverse the boat because we need to support the people in this room.

Mr. Adrian Cummins

I thank the Deputy very much. I am joined by two business owners and I will let them answer the question because they are at the coalface.

Ms Eimear Killian

I operate a small café in Spiddle in the Gaeltacht. We employ 36 staff between full- and part-time. We give opportunity to everyone. The Deputy mentioned giving people the opportunity to work. I have had 11 TY students work for me since last September, so we are really trying to encourage people to work in the industry as well. On the costs, our labour costs are at 44%, which is just not sustainable. They have come up from 40% at the end of last year. It is just really not sustainable. The minimum wage really has to be in line with inflation. To date this year we have paid €23,000 in employers' PRSI. That is a huge amount of money knocked off your bottom line. Our margins are being eroded. I am worried about our business. We are a social hub like the pubs. We are a coffee shop and so many people come there to meet, talk, chat and celebrate. We really are the hub of communities, we give huge employment and then on the other side we sponsor so much in the local community between GAA, local charities and all that sort of stuff as well. The 9% will definitely help. It will ease our cash flow a little bit and bring our margin a little bit up, but labour costs are our big thing.

Deputy Brian Brennan

Okay. I would like a comment from Mr. Hyland.

Mr. Ger Hyland

I thank the Deputy for his words there. Only for the intervention of the Government in the last few months the number of transport companies we were facing losing was phenomenal. Most transport companies in Ireland are paying 36% of their turnover back to the government in tax. That is 36% of every euro my company turns over going back to the government in tax.

The average transport company in Ireland was working on somewhere between 3% and 5% of a margin. When the Gulf crisis happened, fuel went up in one week by over 7%, which completely took that margin away in one single week. That will tell the Deputy the dire straits the transport industry is in. This is the lifeblood of parishes in rural areas. I am a third-generation haulier. I went into transport at 14 years of age when I left school. There are a lot of people like me in transport businesses. We have done it all our lives; we know nothing else. A lot of us are in it for the industry and for the love of our industry. That is what keeps me going. That is what keeps a lot of the transport companies going. It is not for the margin.

An Cathaoirleach

I apologise, Mr. Hyland. We have gone over time.

Mr. Ger Hyland

That is fine.

An Cathaoirleach

I thank Deputy Brennan very much. We will go next to Deputy Gogarty. I apologise; I did not spot the Deputy online. He will be joining us via television.

Deputy Paul Nicholas Gogarty

I confirm once again that I am in the complex. I thank everyone for their contributions. I am conscious of time, so I will try to ask as many questions as I can to all of the witnesses quickly.

First, I note that the Irish Road Haulage Association is looking for a streamlined pathway in relation to the progression for HGV drivers from the car licence to HGV qualification. How soon should that start? Should it be in transition year, for example? What do the witnesses think should encourage young people to get involved? In terms of suitable pathways for non-diesel HGVs, I noticed in terms of biomethane in the UK that the John Lewis Partnership now has over 500 HGVs running on renewable bio. An Post has hydrotreated vegetable oil, HVO, with zero impacts on vehicle performance in Galway and Cork. Is it a just question of the Government providing enough grants or is the infrastructure not there? Obviously, the infrastructure for EVs definitely is not there but there was a pilot done in Munich where ABB and MAN showed that a vehicle can have very fast, rapid 30-minute charges during a HGV driver's break, which would give it up to 400 km and then it can have a slow charge overnight. There is a case for Ireland to put in those kinds of structures for a roll-on, roll-off located supercharger. What would the witnesses like to see in in this regard?

Moving on to the Vintners Federation of Ireland and the LVI, they both have a common issue in terms of energy costs. Again, on that green agenda, most of the publicans would have ample roof space for solar photovoltaic, PV, modules. They could be exporting to the grid at times they are not open or at least creating a very sustainable amount of energy that would cut their costs. Have the witnesses seen any signs that they are going to be getting grants to put this type of infrastructure in? They have the roof space compared to a lot of other types of businesses. I also take on board the comment from the VFI about the tax credit for the verified purchases of draught products capped at €20,000. Are there examples in other EU countries or even in the UK, where this already operates, that we could try to develop? The same thing would relate to the issue of taxis. Are there any other countries where there have been incentives to get more part-time taxi drivers out, particularly for rural areas? It is a huge deficit. We are trying to cut down on alcohol consumption but the pub is still the heart of the community. Getting people into the pub to have a few drinks and being able to get a taxi to go home is a huge benefit to everyone from a social aspect and in all other capacities. Have the witnesses any best practice examples to throw in there?

In relation to the Restaurants Association of Ireland linking future national growth with minimum wage increases to the consumer price index and looking for exemptions to benefit-in-kind rules, etc., I note that the Government is not making a differentiation in any way in terms of the association's needs. The Government is keeping it very strongly with Revenue rules. The same thing applies to tips. Obviously, we are trying to push this as a budget message. What else do the witnesses think we need to be doing as elected representatives to try to persuade the Government and Revenue that there are special cases and that the industry needs to be supported in ancillary ways as well as through taxation and VAT rates?

I hope I have left enough time for the witnesses.

An Cathaoirleach

Is there anyone in particular to whom Deputy wants to direct the questions?

Deputy Paul Nicholas Gogarty

Deputy George Lawlor

In terms of the restaurants, it is energy and the cost of produce. For road haulage, it is the foreign driver issue and what impact the containers going on the ships by themselves is having on the industry. Is it helping productivity and reducing costs? Then, in regard to the rural pubs, on the radical intervention I suggested-----

An Cathaoirleach

Okay. Mind the clock.

Deputy George Lawlor

-----have they ever had any discussion with Government on these things?

Mr. Adrian Cummins

I thank the Deputy for his question. I will be very brief. My colleague, Mr. Lenehan, who is a business owner, will talk to him about energy, energy costs and how that is affecting our industry.

The Deputy mentioned minimum wage and our proposal around the CPI. We have also indicated that we would like to look at the tax on tips for our workers. Other countries like France have done that. Second, benefit-in-kind, BIK, is affecting workers across the country. I will give the Deputy a very simple example. Staff meals out are being hit by benefit-in-kind for anomaly by Revenue, and also professional and union fees, which will hit workers as well. They are things we would like to speak to in more detail and we have proposals around them. I will bring in Mr. Lenehan.

Mr. Paul Lenehan

I thank Mr. Cummins and Deputy Lawlor. Mr. Cummins referred to the objective to create an environment where business can invest, expand trading hours, employ more people and remain viable for the long term, which is key and sums up everything we are trying to do in our industry.

Energy costs, of course, have skyrocketed over the past five years and will continue to be a huge burden on our businesses. We probably need to go back and look at more grants. We have no idea what the next winter is going to bring towards us so I think we need to get ahead of that.

To back up what Mr. Cummins said regarding wages, we have no margin left in our business and the 9% VAT coming back would certainly give us that small bit of a buffer. Going long term, we need to be able to invest. We need wages to come under some control that is definitely linked to inflation. No tax on tips is a big one. That is something that could be looked at. An average hospitality worker could probably earn another 20% in tips alone and that might go up to 50%. Even on the lower scale, 10% to 20%, that is a huge amount of money that can be added in. If that goes through payroll and is done with proper transparency, the overall sector would benefit and without the tax on it, people would see it in their payslips, giving our sector a much better look.

An Cathaoirleach

Deputy Lawlor has a minute remaining. Is there someone else he would like to call on?

Deputy George Lawlor

Yes, the haulage industry, on foreign drivers and-----

An Cathaoirleach

Okay, perfect.

Mr. Ger Hyland

It is taking us between nine months and a year to get a South African driver, from the time we start the process until we finish, with a number of different Government agencies involved. We want a one-stop shop for that person. It is taking that long there are companies here that have applied to get South African drivers here but by the time we had the paperwork up and ready to go, when we went back to the South African driver, he said he was not interested and that he got work elsewhere in Europe.

The Deputy asked me about the trailers in Rosslare. Prior to Brexit, we used the land-bridge. We would get on a ferry here in Dublin, land in Holyhead, drive down through the UK to Dover and then go across to Europe. Now, with customs and whatever, we are going on direct ferries. There were six direct ferries from Ireland before Brexit; there are over 30 today per week from Ireland to Europe. The reason we are using the drop trailer option now in most cases is the length of time it is taking. We have truck drivers, not sailors. That is an additional cost to exports in this country. For every trailer you see, there is a green charge on that trailer leaving Rosslare, going to Dunkirk or wherever it is going. We are paying up to €500 extra in carbon taxes alone for that trailer. All of that is a cost on the Irish economy and on doing business from Ireland. We would like all of that to be looked at but we would certainly like a one-stop shop so we can attract in South African drivers, and drivers from other countries that have an agreement with Ireland.

Senator Ollie Crowe

I sincerely thank the witnesses for the presentations earlier. Mr. O'Keeffe highlighted the need for insurance costs to fall in addressing sustainability for pubs. It is very disappointing to see that despite reforms resulting in fewer claims and lower rewards, as he noted, insurance firms are not passing these savings on to pubs. He also noted that Government reform should focus on ensuring premium reductions for businesses. Will Mr. O'Keeffe expand on that? What measures does he think the Government should take to make further impact here?

Mr. Donall O'Keeffe

There are two points. First, we need better clarity on how insurance premiums are calculated, and on the breakdown of profits between insurers, the legal sector and costs. It seems to us looking from the outside that the benefits of the reforms have been pocketed by the insurance industry and the legal sector. Our premiums are going at something like 5% to 7% annually in an environment where the previous Government and this Government have delivered very significant reforms. We are seeing lower claims and less costly claims.

Despite the fall in those claims, our premiums are going up. The only KPI or measure that matters is the level of insurance premium that the business pays and that is continuing to escalate. There needs to be a better understanding of why insurers and the legal sector are benefiting from those reforms. Clearly, the sector needs more competition. There is an office designed to increase the number of insurance suppliers in Ireland and it needs to deliver more because competition is ultimately what is required here.

I will make one additional point. Insurance is a significant problem for the cost of every pub, but for large late bars in particular, it is an extortionate burden. A large late bar in the centre of Dublin could be paying anything form €80,000 to €120,000 on insurance alone. That is €2,000 to €3,000 per week being spent on insurance.

Senator Ollie Crowe

I thank Mr. O'Keeffe. Mr. Cummins mentioned the need to reform employment permits. In fairness, he has raised the issue a couple of times. To help address recruitment and retention challenges, could Mr. Cummins expand further on the detail of what changes are needed at this stage?

Mr. Adrian Cummins

On work permits, there is a proposal to link your work permit to your visa and make it a one-stop application process. When you apply for your permit, you would apply for your visa at the same time. At the moment, you have to apply for your work permit, wait until you get it and then apply for your visa. If somebody is coming from India to work in an Indian restaurant, it could take up to 12 months before they arrive. In that case, they are more than likely not going to arrive. They are going to go to the Middle East where it is easier to get a job. We would like that integration done.

We have an issue in hospitality at the moment whereby if you have a restaurant or pub and you are doing pizza or other food to go, you are now excluded from getting a work permit. That means that even if only 10% of your turnover is takeaway food, you are excluded. In the small print, takeaways are excluded from work permits. I get it if your business is fully takeaway. You have to look at the more labour-intensive sit in and sit down sector. We would like to see that.

In terms of attracting staff to our industry, Ms Killian has spoken already. She might like to say a few more words.

Ms Eimear Killian

Transition year programmes are definitely good. We want to encourage people in schools. Everyone should work in hospitality or retail. It brings people out. Such work can be people's first jobs and they encourage people to socialise, to engage and to be able to work. We bring them along. Three staff started with me this week for the summer. They are all between the ages of 15 and 17. These are their first jobs. They are getting training from us. We feed them and train them, and they are getting paid. It gives people a good start in life. It is part of being in a rural community. That is the base of my staff and I hope that some of them will stay on. At the moment, I have people who started during TY and are now in college. They work through the winter part time and then come on full time in the summer. We are the industry where people get their first jobs. We must encourage that through TY and put proper programmes in place. Apprenticeships need to be a little more streamlined for our industry.

Senator Ollie Crowe

I thank Ms Killian. That is very encouraging to hear. She is doing the community some service and it is welcome news.

Mr. Crotty spoke about the pubs as community infrastructure. It is an important point. We are all well aware of smaller villages across the country where the pub is the heartland of the community. It is where people come together to celebrate, thankfully, most of the time, whether it is after a local GAA match or whatever the case may be. We do not want to see pubs closing. That is the loss of businesses and jobs, but also the loss of community resources.

Mr. Crotty spoke about engagement with the Department of Finance. Could he expand on that? Perhaps he would outline his current proposal and address the concerns the Department raised.

Mr. Pat Crotty

The Department did not raise concerns about our current proposal. It accepted that the proposal was compliant with EU directives and mirrored schemes that are already in use in the country. Our difficulty was last year. That is history. I know the Senator has a short amount of time so I am not going to rehearse it for him. We have moved on. The Department is happy. We have taken all advices that the proposal is compliant. The Department has confirmed it is compliant and does not step on anyone's corns in Europe. It is then a matter for political decision and whether politicians are prepared to help us. We hope they will. They have been supportive of the sector. The change in the VAT rate to 9% is indicative of the fact that they recognise there is a significant problem that needs a significant response. It does respond, but it does not respond for businesses in the same sector, which are subject to the same Government-driven costs, particularly everything in the labour space, that do not do food. They have all the same costs. They are looking at their neighbours across the street who are running a very similar business but with food. Those other businesses will have a benefit from 1 July. Those that do not do food are struggling with costs. They started from a much lower gross profit margin. If are only selling pints, you are starting at 55% and not 70%. Labour costs started lower, too, but if they go up by 40%, your wages go from €16 per hour to €22 per hour. It is a 6% increase in costs overall. You probably were not making a 6% profit in a small pub. The difficulty then is that you are either treading water or nearly under water. That cannot be sustained and it certainly will not be sustained for the next generation.

Deputy McCormack asked earlier, "Where to from here?" We need to have a debate as to whether the State sees value in the pub as it exists, in its cultural and social element, and does it want it to survive. If it does, and if we agree there is value to keeping the pub, we must change. That does not mean that every pub will survive. In the best of times, there were pubs that closed and in the worst of times, there were pubs that thrived. There will never be a simple solution. If we can take the right steps to make it sustainable for the next generation, we will have something to work with.

Senator Ollie Crowe

I thank Mr. Crotty. It is an important point in the context of the Irish economy that tourists consistently highlight the Irish pub as a key attraction, frequently ranking it number one in surveys. I ask the witnesses to expand on the VFI's view of pubs as cultural infrastructure. What do they believe is the importance of that?

Mr. Michael O'Donovan

Tourism is one of the biggest industries in rural Ireland. The pub plays a vital part. When tourists comes to a town or village, they want to go and see music and meet the locals in those pubs. They are crucial to rural Ireland and for us. It goes back again to the survival of the pubs. They create employment in those areas. Tourists wants to come here for the experience. They want to see all the cultural offerings and amenities that we have, and the pub is a vital part of that for the survival of rural Ireland.

An Cathaoirleach

We will take a five-minute sos to allow people to use the facilities or toilets.

Sitting suspended at 2.08 p.m. and resumed at 2.13 p.m.

An Cathaoirleach

The next speaker is Fine Gael Senator Linda Nelson Murray.

Senator Linda Nelson Murray

I thank everybody for being here today. The representative groups could have done with three hours each because there is so much to discuss about the cost of doing business. We have done a lot in this committee with various stakeholders and witnesses. I turned around to Deputy Brennan earlier and asked what the magic fix is. It is so difficult to know. I know we could say there are many things we need to do but, as a business owner myself, the increase in costs is really tough. We can really feel it.

I will move on to some of my comments and questions. Mr. Crotty mentioned how pubs are used as good community spaces. It brought me back to last weekend. My children were involved in the Cumann na mBunscol division 1 final. They won. Both sisters, aged ten and 11, were on the team, one as a substitute and the other as a player. It was such a celebration and it was all in the local pub. I am from an urban area, Navan, but I live in a very rural area, Kilmessan. We made our way back to the pub. There were nuggets and chips for the kids. We were not there until late at night. It was just for two hours of celebrations, with the medals and cup. If we did not have the couple of pubs in Kilmessan, we would not have had anywhere. There is no real community facility. Where we were was a great place for families to be.

I could have put my head on top of Deputy Brian Brennan's for all he was saying because he spoke a lot of sense. I cannot imagine what rural communities, and other communities all around the country, would be like with a quarter of the pubs gone. That is a very scary situation. As political people, we need to do all we can to keep that culture. People now go to other people's houses for barbecues and so on. There are more and more cans of beer from across the Border and we are losing the income here. In some cases, people feel they may have no choice but to go over the Border to get cans. We are also losing income on the return-and-recycle scheme. The trend is a little worrying. I could not support the LVA and VFI more on the question of hanging on to our pubs.

On the Irish Road Haulage Association, one of the very first political meetings I ever went to before I was ever a politician was in County Wexford. The current Ceann Comhairle, Deputy Verona Murphy, was there where the difficulties with insurance affecting members of the IRHA were outlined. There are two brilliant people in my area, Geraldine and Gerry McQuaid, who have been advocating for everything. I have sat down at the kitchen table and listened to them talk about how difficult it is to run haulage businesses, given the tolls, charges, fuel costs and labour costs. I acknowledge everything the witnesses are saying in this regard. I would like to explore further what they mean and what we can do to decrease the two-year wait that it takes to get somebody properly licensed to drive a vehicle.

I will move on to the insurance side of things. There will be no surprise that I am going to talk a little bit about insurance. Mr. Crotty, I believe, said something about our not having seen the savings promised by Government reforms. That statement is incorrect. The Government has delivered many reforms and continues to do so, as promised. The savings were not promised by the Government; they were promised by the insurance industry, which asked us to make these reforms, but it has not passed on the savings. We keep coming to committees to talk about what more the Government can do. I have to give credit to the current Minister of State, Deputy Robert Troy, and his predecessors, including Deputy Jennifer Carroll MacNeill and Michael D'Arcy, and all the various Fine Gael and Fianna Fáil Ministers who have been trying to keep on top of insurance reforms, but we are not seeing the insurance industry pass on the discounts. It needs to be held to account for that.

We have Senator McCarthy down as our fifth speaker, so he may proceed.

Senator Aubrey McCarthy

I thank the witnesses for being here today. I wear a few hats in that I am in business with SMEs, and I am involved in the homeless community and housing. I know how all this affects things. Today in the Seanad, I spoke about SMEs and referred to an article last week in The Irish Times, which interviewed a cafe owner whose latte is priced at €4.30. He said that when his accountant broke it down, it was found that the owner makes just 18 cent on each latte. The margins are wafer thin, as Senator Nelson Murray said, and the increases in insurance, wages and rates are making it non-viable. I had a cafe near Mr. Lenehan in County Kildare, which I closed a few weeks ago. It had been there since 1967. I kept it going because of the pride that the family had in it. It was on the family farm. Eventually, I thought that there was only so much I could subsidise it. We were busy and full every day, but it just was not making money. The perception out there is that you are making a lot of money out of this. I know the arrangement in Kill, Kildare and Ballymore. People say, "They are making a fortune; look at the price of steaks" but when you break it down, the costs and the margins are very tight.

Mr. Cummins welcomed the 9% VAT rate. In certain sectors, and certainly in my own case, it was not enough to stabilise things. What are the next 12 months looking like with regard to closures? Are many closures expected?

Mr. Adrian Cummins

I thank the Senator for that and for his comments earlier on SMEs. Yes, we are anticipating closures. There are businesses that will not survive because we have headwinds coming, for example in terms of energy. What is happening in the Middle East will have knock-on effects in terms of energy for the winter, but also in terms of raw materials and food products. Fertiliser prices will go up because 25% of ammonia, which is part of fertiliser, comes out of Qatar, which has been and will be affected for five years. The price the farmer is going to have to pay for fertiliser will have a knock-on effect for everybody else. We will have to take the brunt of that, by taking it in from our suppliers in terms of food costs. We are going to have headwinds. We can see customers being affected by two ECB rate hikes, one already announced and another forecasted. This will have an effect on consumer confidence. We are a luxury item. People do not have to go out and eat - they can eat at home - so that will also have an effect.

An Cathaoirleach

I thank Senator McCarthy for that. Next is Deputy Clendennen.

Deputy John Clendennen

I thank the Chair. There are many familiar faces in this room. I am not just talking the talk on this one; I am walking the walk as a small publican and accommodation provider in Offaly.

The quick win for the Government and the country is HVO. We could reduce our carbon footprint by 90% tomorrow morning if we got support to use HVO in our vehicles. If that happened, the reduction of carbon emissions across the country would help us to mitigate the EU fines that are coming down the line. It would be cost-neutral for the Government. We will put in our budget submission next week. It all relates to HVO. It shows that there is enough of a definite supply of HVO in the country to sustain our industry and help us to mitigate the fines that are going to come from the EU.

An Cathaoirleach

I appreciate that. I am sorry for interrupting. I did not get an opportunity to speak. I will do so for 60 seconds.

The committee has been working on the issue of competitiveness for the past 12 months and looking at everything from insurance to energy. We will have a finalised draft report on everything that has been discussed. It has been hugely concerning to see what is happening in the SME sector - and I include the hospitality trade in that - with businesses under ferocious pressure. When we were deciding on which witnesses we wanted to invite today, we wanted to have a diverse mix but also organisations that are similar in terms of what they do. It has been topical having the Irish Road Haulage Association before us, particularly after what happened a few months ago. We wanted to have engagement on a cross-party basis. I am grateful to all of the witnesses for attending.

I apologise that our meeting will conclude 15 or 20 minutes earlier than normal. That is because the Dáil vote will bring us up to 3 p.m., when, I understand, some of the witnesses will be heading to the audiovisual room for a briefing. I thank the witnesses for their time and for being here. We must run to the Dáil.

I propose that the committee meet in private session at 2.15 p.m. on Tuesday, 23 June and in public session at 12.30 p.m. on Wednesday 24 June. Is that agreed? Agreed.

The joint committee adjourned at 14:38 p.m. until 12:30 p.m. on Wednesday, 24 June 2026.

Joint Committee on Enterprise, Tourism and Employment debate - Wednesday, 17 Jun 2026

Competitiveness and the Cost of Doing Business in Ireland: Discussion (Resumed)

Mr. Ger Hyland

Mr. Donall O'Keeffe

Mr. Adrian Cummins

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Michael O'Donovan

Mr. Michael O'Donovan

Mr. Michael O'Donovan

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Donall O'Keeffe

Mr. Donall O'Keeffe

Mr. Donall O'Keeffe

Mr. Donall O'Keeffe

Mr. Ger Hyland

Mr. Ger Hyland

Mr. Donall O'Keeffe

Mr. Adrian Cummins

Ms Eimear Killian

Mr. Ger Hyland

Mr. Ger Hyland

Mr. Ger Hyland

Mr. Pat Crotty

Mr. Adrian Cummins

Mr. Paul Lenehan

Mr. Ger Hyland

Mr. Donall O'Keeffe

Mr. Adrian Cummins

Ms Eimear Killian

Mr. Pat Crotty

Mr. Michael O'Donovan

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Pat Crotty

Mr. Adrian Cummins

Mr. Adrian Cummins

Mr. Adrian Cummins

Mr. Adrian Cummins

Mr. Ger Hyland

Mr. Ger Hyland

Mr. Ger Hyland

Mr. Donall O'Keeffe

Mr. Ger Hyland

Mr. Pat Crotty

Mr. Michael O'Donovan

Mr. Michael O'Donovan

Mr. Michael O'Donovan

Mr. Ger Hyland

Joint Committee on Enterprise, Tourism and Employment debate -
Wednesday, 17 Jun 2026