Heineken chief predicts more pubs to close

MORE pubs will close in the coming months as banks cut back on overdraft finance, forcing publicans to operate on a cash basis, Heineken Ireland managing director David Forde predicted yesterday.

Mr Forde said banks are not lending at the moment.

“Trade working capital is severely constrained at this moment in time, despite some rhetoric from the banks. The banks are just not lending and they are squeezing, in many cases some very good businesses in the market,” he said at the Cork Chamber Business Breakfast in association with the Irish Examiner.

Mr Forde said being a publican has become a part-time job for many bar owners and he expects this to continue, with pubs opening for shorter hours and many only opening at weekends.

“Structurally, and particularly with a declining population, the market is possibly still ‘over-pubbed’ and what you will see, if we have continued emigration, is a continued decline in the number of pubs in the market,” he added.

“From time to time there are peaks and troughs in the year... Our customers need to dip into their overdraft – that’s an important structural part of their business – slowly but surely that’s being cut. Our business is becoming more and more a cash business every day and it shouldn’t be. We are 90% on direct debit, but now publicans are paying by cash because it is so constrained.”

Mr Forde said the cost base of Heineken Ireland is improving. He said: “However, there is still a significant gap versus our European peers.” He praised Finance Minister Brian Lenihan for cutting excise duties in the December budget and said the cut has certainly stemmed the flow of consumers across the border.

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