‘Minimum price for drink only way to save pubs’

LAWS to set out minimum prices for alcoholic drinks are the only hope for the pub industry, publicans’ representatives have claimed.

The Vintners Federation of Ireland (VFI) said that, unless supermarkets are banned from selling drink at bargain prices, hundreds of pubs will again close in the coming year.

Figures from the Revenue Commissioners revealed yesterday that 1,300 pubs went out of business in the past five years, leaving the number of licensed premises at 7,616, which is 20% less than a decade ago.

Gerry Mellett, president of the VFI, which represents around 4,500 pubs outside of Dublin, said the removal of the ban on below-cost selling, combined with the smoking ban and stricter drink-driving laws was making it increasingly difficult for pubs to stay in business.

However, he said that bringing back the prohibition on below-cost selling would not be sufficient, as it was too difficult to work out the true cost involved for the myriad of different retailers. Stipulating a price below which drink could not be sold would be more effective, he said.

“What the Government have got to do is bring in a minimum price for alcohol, which will go some way to levelling the playing field. You have a crazy situation in supermarkets where alcohol is cheaper than water; never mind the economics of that, there are social and health issues to think about.”

Mr Mellett would not specify what the minimum price should be for any given alcohol product, saying it would be a matter for the Government to decide, so long as it was realistic.

“We are not afraid of competition but, the way things are, we cannot compete on level terms. Supermarkets have massive buying power and can sell drink as a loss leader to get people in to buy groceries.”

He rejected the suggestion that pubs could cut prices themselves in an effort to attract more customers.

“We’re at the minimum price at the minute. Our costs are fixed, regardless of the level of business we’re doing, and they’re not getting any smaller.

“In fact, our rates are going up, ESB went up 10% last year, oil is gone through the roof. Those 1,300 pubs that went out of business in the past five years, none of them closed because they were making profits.”

Mr Mellett said 70,000 jobs were at stake in pubs across the country, along with the €2 billion in tax revenues that went to the exchequer each year. If any other industry providing 70,000 jobs was in jeopardy, there would be action.”

It’s anticipated that the National Substance Misuse Strategy, which was due to have been published by the end of 2010, will recommend a return to the ban on below-cost selling, but Justice Minister Dermot Ahern would give no commitment on the subject when he was questioned in the Dáil shortly before Christmas.

“I understand that the steering group has been examining a range of issues relating to alcohol policy, including pricing issues, and that it is due to submit its report, including policy recommendations, in early 2011,” he said.

Drink cost: How prices have risen

Changes in average price and tax take for the pint over ten years:

* Stout in 2000: €2.87 of which 47 cent was due in excise duty and 50 cent in VAT (tax = 33.8% of price)

* Stout in 2009: €4.09, of which 47 cent was due in excise duty and 72 cent in VAT (tax = 29.2% of price)

* Lager in 2000: €3.18, of which 47 cent was due in excise duty and 55 cent in VAT (tax = 32.2% of price)

* Lager in 2009: €4.50, of which 47 cent was due in excise duty and 80 cent in VAT (tax = 28.2% of price)

- Figures from Revenue Commissioners Statistical Report 2009