Price of pint 'needs to be €20' to make a profit

Businesses will have to either increase prices or close up shop in the months ahead, according to the director of accounting firm BDO Ireland.

Price hikes and more closures in the restaurant sector are imminent, due to the increase in the Vat rate and minimum wage, it has been warned.

According to the director of the accounting firm BDO Ireland, businesses will have to either increase prices or close up shop in the months ahead.

One restaurant owner says he would have to charge between €15 and €20 for a pint at the moment, to make any profit margin.

Restaurant owner Paul Horan from the Esquire in Tramore, Co Waterford, has been in business for over 40 years and during a recent feasibility study was told if he was to make any profit, that is what he would be faced with.

"If I was to remain in business, we would now have to raise a steak which is currently €25 up in the region of €60 to €70," he said.

"If we were to maintain, say, the price margin that I had, say, two years ago, I would need to sell a pint in around €15 or €20."

Mr Horan said that such a price increase would not be fair and customers would not pay it.

He said action must be taken to curtail the prices of everything.

Blathnaid Bergin, a business lecturer at Ballymaloe Cookery School and restaurant adviser with The Business of Food, says price increases are imminent.

"We are going to have to understand that the restaurant and hospitality industry will probably have to increase prices," she said.

Austin Hickey, director at BDO Ireland, an international accounting network, says some changes announced in the budget will bring further challenges.

"We are facing into rising interest rates, the Vat rate, and also the planned increase in terms of the minimum pay."

A number of restaurants have been left with no choice but to shut up shop in recent weeks, including the Alba in Enniscorthy, Co Wexford, which announced on social media overnight that it would be closing.