Publicans have pledged to lower the price of a pint by 2p in light of the latest drop in VAT, which came into effect on New Year's Day. The Vintners' Federation of Ireland has written to its 6,000 members strongly recommending that the VAT cut should be passed on to consumers.
A VFI spokeswoman said the federation was going out of its way to stress the importance of cutting prices.
The Licensed Vintners' Association, representing Dublin publicans, has urged its members to follow suit. Its chief executive, Mr Frank Fell, said: "We have had two previous reductions in VAT from 25 to 23 per cent, and 23 to 21 per cent, and in each case we passed it back to the consumer. This shouldn't be any different."
The Government has hinted at introducing price-fixing measures and increasing competition in the industry if prices do not come down in line with VAT.