Major closure alert for hundreds of pubs as fears for industry amid cost crisis

HUNDREDS of pubs in rural Ireland are in danger of closing unless the Government helps them bring their costs down.

The warning was issued by members of the Vintners Federation of Ireland after a nationwide survey among its publicans showed many are struggling to survive.

The survey focused on factors contributing to the cost of doing business and was published in the Spring VFI Voice magazine.

It found that almost one in two – 44 per cent – of country pubs have seen their business costs rise by over 30 per cent in the past year, which is affecting their viability.

Their greatest concern in the battle to keep their doors open is energy prices, followed by increased staff costs, taxation – including business rates and excise duty – and insurance.

Meanwhile, 24 per cent said their costs had gone up by between 21 to 30 per cent.

The VFI is demanding that the Government reduce the VAT rate for the hospitality sector back from 13 to 9 per cent to relieve the financial pressure and to get energy costs down.

A recent report from the Drinks Industry Group of Ireland (DIGI) showed that 2,000 pubs across the country had closed since 2005, with the country pubs most at risk.

In 2022 alone over 120 shut down and never re-opened.

Mary Murphy, who runs the Hollow Bar, in Ramsgate, New Ross, Co Wexford, told Voice of the bills that are really affecting her.

She said: “The cost of staff and what it costs to run a premises along with the insurance and electricity.

“Almost everything has gone sky high . When gas or fuel goes up, all suppliers drive up prices on their products.

“The problem is that there are so many places closing such as coffee shops, pubs and restaurants. And some businesses are closing Monday to Wednesday.

“For anyone starting a business like this I cannot not see how in this climate it would work because of overheads.”

Conor O’Neill of the Glyde Inn, in Annagassan, Co Louth also told the publicans’ magazine: “It’s common knowledge that costs have increased and had an impact on our business, especially VAT and energy costs.

“Employee wages and pension provision are issues that are coming down the road. That’s a lot of increases.

‘Closed two days a week’

“Our wage bill has dramatically increased. We’ve closed two days a week and I am doing a lot of hours myself that I wouldn’t have done before.

“Normally you’re looking at 30-35 per cent margins. I have always gauged that as the target we’re looking for and we’re not getting that.

“A lot of people tend not to open until the evening. Tourists can be disappointed by places not being open for breakfast or lunches. And that’s how it is.

“People are trying to cut back so they can make it viable, so unfortunately the staff are getting fewer hours.

“You have to be organised and have a good idea of footfall so you can cover your expenses.”

Calls for Government action

Mary called on the Government to give struggling businesses help in paying for their energy bills.

She added: “Businesses aren’t being talked about for energy price reductions. Everyone’s biggest output is energy. You are still paying huge money out. When you are in this business you rely a lot on the power – fridges and other appliances cost big money.”

Conor also told Voice: “If there were more incentives to use green energy that would be great.

“If there was any way the Government could help us with increased costs, not just energy but also wages and the VAT – any sort of rebate would be welcome.

“If the Government could help us get through this difficult period, things will even out.”