Rural pubs may go to wall, says VFI

Rural pubs across the country are facing ruin unless a slump in alcohol sales is addressed, the Vintners Federation of Ireland claimed today.

Crippling tax laws and a fall in sales for the first time in years could lead to pubs with small customer bases facing closure, VFI president Seamus O’Donoghue said.

The VFI, whch represents some 6,000 publicans, blamed a combination of the smoking ban, over-the-top tax and excise duty and industry price increases which they cannot control.

“Contrary to popular belief, most price increases are outside the control of publicans,” Mr O’Donoghue said.

“And since the smoking ban was introduced in March, publicans have reported an average 15-25% drop in business with daytime trade taking a particular hit.”

Mr O’Donoghue added last month’s increase of 7 cent on a pint by Diageo was putting extra pressure on an already struggling industry and called on the Government to ease taxation.

The VFI said the 21% VAT payable by pubs was significantly higher than the 13.5% payable by other service-orientated businesses.

“Many small, rural, family-owned pubs have been hit particularly hard since the introduction of the ban and have serious concerns for their livelihoods and the future of their staff,” Mr O’Donoghue claimed.

“Once the summer season ends and the weather worsens, further loss of business is inevitable.”

The VFI said wine tax in Ireland was the highest in Europe with beer tax the second highest while excise duty on beer was 11 times higher than in Spain.

“The average price of a pint in a VFI pub is €3.50. Rural publicans are facing increasing difficulties with most premises reliant on a small customer base in what are often over-pubbed towns.

“The figures confirm that our tax regime is crippling the small rural pub,” Mr O’Donoghue said.

The group said new figures showed beer consumption had fallen by 2.7%, with spirits down by over a fifth, and alcopops down by 15.5%, and added that the drop in total consumption was the first to hit the industry for several years.

Wine consumption, however, had risen by just under 9%. Industry experts have suggested the increase is due to more off sales purchasing as more people drink at home due to the smoking ban.