By Ulrich Adam - Director General of spiritsEUROPE
Following strict lockdowns and weeks of closure, resulting in huge losses of revenue during the summer months, bars and restaurants across Europe have reopened and taken their first tentative steps towards recovery.
What seemed to be a temporary break from the ‘normal’ quickly turned into a protracted struggle for economic survival. No sector has been more impacted by the Covid-19 pandemic than leisure and hospitality – especially as it relies on socialising and conviviality.
Before the crisis, dining out was one of the most popular activities among Europeans, and our nightlife was a major draw for international tourists. Months after member states lifted their lockdowns, restaurants and bars are still struggling to attract customers as coronavirus fears linger.
Unfortunately, many of these bars and restaurants could be permanently out of business due to this crisis.
This is a social tragedy as well as an economic catastrophe, and its effects spread far and wide. As the European spirits sector, we know just how crucial these venues are to preserving livelihoods, traditions and communities across the EU. With 54% of spirits produced in Europe sold in bars and restaurants, our sector is crucial in supporting more than 12 million jobs in Europe’s hospitality industry.
To help workers in affected sectors, we launched our Fit for Recovery Plan on 1 July. Today, three months later, reflecting on the actions of governments across and following discussion with our partners along the supply chain, we are launching an updated version of the Plan.
This acknowledges the progress made in crisis response, but brings into focus the existing threats the distilling, hospitality and tourism sectors face as we look towards the months ahead.
We were particularly proud to see so many of our members step up to the plate and contribute where they could to local services and communities.
These efforts have continued over the summer to support the hospitality sectors – with national campaigns to secure heritage status for bars, paying the salaries of bar staff who may be out of work, or directing much-needed funding support to bars closed during the lockdown, amongst others.
These efforts are significant, but they alone will not be able to rescue the industry. What is needed is coordinated action on the local, regional, national and European level.
That is why we have developed a five-point policy plan to support the industry and millions of jobs in an effective way:
1. Taxation relief
Spirits in Europe are subjected to some of the highest excise rates in the world. Though a number of European countries have reduced VAT rates for hospitality businesses, beverages are still regrettably excluded from some of these policies. Governments should implement comprehensive VAT relief programmes alongside temporary excise reductions to encourage consumers to support their local hospitality businesses.
2. Support with cash flow
We are calling on governments to offer deferred excise payments to small and medium-sized distilleries, and to facilitate access to finance for our (otherwise financially viable) members who may need extraordinary bridging loans to get through the difficult trading period ahead.
3. Action on trade
Europe’s premium brandies, whiskies and vodkas are much-loved and sought-out across the world. We seek resolution of the trade dispute with the USA, our biggest export market, which currently applies a 25% tariff on many of our members’ products. Resolving this would provide vital relief to small distilleries and exporters across the EU.
4. Harmonisation of travel guidance
We welcome all efforts to harmonise travel guidance across the EU, so that citizens can begin to travel safely and confidently again.
Clear and consistent guidance on reopening
We welcome the moves of many governments to introduce graduated guidance for the sector over the medium term, based on a system of COVID alert levels. This allows frontline businesses to plan, and our members to effectively target their support.
Given the severity of the crisis we are expecting a negative long term impact on the hospitality and leisure sectors. We are determined to work with governments and our members to support the workers and businesses affected. The recovery will only succeed as a joint effort that ensures that nobody is left behind.
To learn more about our five-point Fit For Recovery Plan, please visit: https://spirits.eu/policies/covid-19-a-spirit-of-recovery