Pub sector ‘in meltdown’ as sales fall 14%

THE pub sector is “in meltdown” with sales plunging by more than 14% this year as consumers switch to drinking at home, the Drinks Industry Group of Ireland (DIGI) has claimed.

However, off-licence sales have soared by 15%. Pubs are also being hit by consumers drinking less and switching to better value draught beer and away from spirits.

Ten years ago, people were drinking an average of 14.4 litres of pure alcohol annually, but this has dropped to about 11.2 litres today.

The DIGI estimated that 25,000 jobs could be lost by the end of the year in the drinks industry from a high of 100,000.

Unsurprisingly, the group is not advocating drinking at home, saying pubs are the most controlled environments for drinking alcohol, whereas people tend to drink more when at home in an uncontrolled environment. They also said in the last 12 months 1,000 pubs have not had their licences renewed.

Licensed Vintners Association chief executive Donall O’Keeffe said in the short to medium term there is “absolutely no sign of market conditions improving for the pub trade”.

“Rather, the likelihood is that current trends will continue, forcing many publicans out of business and thousands of subsequent job losses,” he said.

He said of particular concern were the ongoing prospects of weak consumer demand for the immediate future and the pressure being generated by Government-related costs such as commercial rates and regulation.

“As a consequence, the sector is in a crisis situation,” he said.

Figures from the DIGI show the pub sector suffered a 14.1% decline in the first seven months of this year following a near 9% decline last year. This is part of a wider trend of decline in the trade over the last decade that has seen the volume of bar sales fall 25% since 2000.

On a positive note the DIGI said the Government’s excise cut in last December’s budget has stemmed cross-border alcohol sales.

DIGI chairman Kieran Tobin said: “The clear evidence is that the excise reduction has had the desired effect on cross-border sales. Yet while the drinks market has grown and cross-border sales decreased, the overall situation remains extremely difficult for a key national industry that continues to support 80,000 jobs and provide almost €2 billion in VAT and excise revenue to the state.”

The DIGI is asking the Government, in its pre-budget submission, to cut excise duty on alcohol and reduce commercial rates.

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