600 pubs at risk of closure, says industry group

The pub trade is in “crisis” and as many as 600 pubs are likely to close between this year and next, according to a group representing the sector.

DIGI, the Drinks Industry Group of Ireland, said analysis of figures for the first seven months of the year showed an 8.2% volume decrease in the amount of drink sold in pubs.

It also said average sales volumes for the first seven months were 34.2% below the pre-recession levels of 2007 — a situation which put thousands of jobs in the sector at risk.

The group, which comprises of both the Vintners Federation of Ireland and the Licensed Vintners Association, said 15,000 jobs had been lost in the past five years and that others could go unless the Government resisted pressure from the troika to increase excise tax in the next budget.

The group blamed the overall weakness of the domestic economy and continued pressure on discretionary income, but said the pub trade was suffering “disproportionately”.

Donall O’Keeffe, DIGI secretary and CEO of the Licensed Vintners Association, said: “The pub sector is in crisis. The losses that are being experienced year-on-year, month-on-month, simply cannot be sustained.”

He said between 250 and 300 pubs were expected to close this year and there was “no reason to believe that will change next year”.

He said rural pubs were most at risk, followed by suburban pubs, while those in larger urban areas were performing better.

The total consumption decline of 3.2% from January to July this year was down to decreases across all drinks categories including beer, wine, spirits, and cider, and also indicates a fall in off-licence sales. Comparing the first seven months of 2012 to those in 2011, pub sales volumes fell 8.2% while bar sales value fell 7.3% — with the result that the July sales volume was 11.4% below that of July 2011.

It prompted DIGI to call on the Government to hold back from increasing excise duty in the next budget, as it claimed the drinks industry could not sustain the impact of such a move.

Mr O’Keeffe said: “In the short to medium-term there is absolutely no sign of market conditions improving for the on-trade. Rather the likelihood is that current trends will continue forcing many publicans out of business and thousands of subsequent job losses.”

DIGI chairman Kieran Tobin said: “While our drinks products continue to perform very well internationally, the domestic market on which our export success is founded, is in very significant decline.

“The Government should also recognise that despite the troika’s proposal foran excise increase, this would further weaken the on-trade and independent off-trade in particular while also running contrary to efforts to boost tourism, consumer spending, and supporting jobs.”

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