Jobs in drinks and hospitality business around Donegal are going to be particularly vulnerable after Brexit, according to the Drinks Industry Group of Ireland (DIGI).
Over 4,602 people are employed in the industry in Donegal – which counts for 7.9% of the total employment in the county.
But the shock of a no-deal Brexit may lead to a recession-type downturn and force some businesses to close up shop, warns DIGI.
Donegal’s pub population has fallen by 20.1% since 2005 as 91 premises closed down in that time.
DIGI is warning that businesses will take a further hit after Brexit, as a no-deal will lead to a reduction in tourism numbers and a tougher export market that are likely to follow a further devaluation of sterling.
To safeguard the industry, DIGI is urging the Government to reduce alcohol excise by 15% over the next two years.
Rosemary Garth, Chair of DIGI and Director of Communications and Corporate Affairs at Irish Distillers, said:
“A no-deal Brexit will have immediate consequences for Ireland’s drinks and hospitality businesses. If the sterling devalues further, then it will be harder and more expensive for Ireland’s drinks businesses to export their products to the UK, which is a major market. Border controls will further delay road freight trade with mainland Europe.
“For drinks and hospitality businesses in rural Ireland, particularly the seasonal kind, reduced spend by British tourists will have a lasting, damaging effect on their ability to take on new workers or keep on existing staff. In extreme cases, a no-deal Brexit may lead to a recession-type downturn and force some businesses to close up shop.
“By reducing Ireland’s disproportionately high alcohol excise tax over the next two years, the Government will be giving drinks and hospitality businesses a lifeline. Rural businesses will be better positioned to weather the worst of a no-deal Brexit, to be more competitive and improve trading.”
Meanwhile, the Independent Craft Brewers of Ireland, which includes Kinnegar Brewing in Donegal, is calling on the Finance Minister Paschal Donohoe to maintain the current 50% excise relief on Alcohol Products Tax, which is applicable to microbreweries, in advance of his Budget 2020 plans.
Peter Mosley, Chairman of the ICBI, said: “Every member of our association is currently developing its own small-scale artisan brewery for growth and development. Many of our members are small breweries located in very rural locations and enjoy great support from their local and very loyal community by creating direct employment and tourism in the region. Sadly, many of our members are battling to survive. All of our artisan producers are dependent on the support from this excise relief.”
