Rural pubs’ survival fears revealed in new report

Pubs in rural areas have to turn over at least €8,000 per week or they may not survive, according to a new report.

AIB’s Pubs Outlook report for 2018 found the industry, which employs 230,000 people, is on the road to recovery with significant demand for pubs in key urban areas.

Tony Morrissey, managing director of pub specialist auctioneering firm Morrissey’s, said despite growing stability, many publicans are still vulnerable.

“If a pub is not turning over €8,000-€9,000 a week in rural areas, then it’s going to be very difficult for them to survive. The same is true of Dublin and if a pub is not turning over between €12,000 and €13,000 a week, it’s in trouble,” he said.

There were 7,840 pubs and licensed premises registered with the Revenue Commissioners at the end of September last year, according to figures supplied by the Vintners’ Federation of Ireland (VFI).

More than half, 4,041, turn over less than €190,000 per annum — €3,650 per week. A total of 5,877 are turning over nearly €380,000 — €7,300 per week.

The figures are for alcohol sales and exclude turnover from food.

 

The report found:

  • Cork had the highest number of pubs in the country last year with 955, compared to Dublin with 722. There is a pub in Cork for every 543 people;
  • Kerry had 435 pubs, or one for every 334 people, compared with 722 pubs in Dublin, or one for every 1,649 people;
  • Mayo has the most pubs per person in the country, with 373 pubs, or one for every 323 people;
  • Galway and Tipperary each had more than 400 pubs;
  • Galway has 475 pubs, or one for every 506 people;
  • Tipperary has 422 pubs; one for every 350 people;
  • Laois has the fewest pubs with 123, or one for every 733 people.

The VFI said pubs continue to operate in a challenging environment.

It said the increasing cost of insurance, along with high commercial rates and strict regulatory requirements, make for difficult trading conditions, particularly in rural areas.

VFI chief executive Padraig Cribben said the cost of insurance is the number one issue facing publicans.

“There is an urgent need for the Government to take action and introduce transparency to how premiums are calculated,” he said.

“We also require more information as to how, why, and when claims are settled.”

In relation to pubs being sold, Mr Morrissey states in the AIB report that over the last five years, as much as 60% of all transactions in the Dublin market were insolvency-related.

“While there are still a few cases in the pipeline, the market is now approaching a pre-recession level of normality with around 4%-5% of stock changing hands every year. That’s around 35 pubs a year which is what it used to be before the downturn,” said Mr Morrissey.

There was a 6% increase in turnover in card sales for the sector for 2017, said AIB.

Food service in pubs reached €982m in 2017, up 3% year on year.

READ MORE: Cork has the most pubs in the country - bar none

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