Further blow for Irish pubs

Further blow for Irish pubs

Hundreds of pubs across Ireland could be facing LAST ORDERS following the latest price pint hike.

Drinks giant Diageo has increased the cost of its stout and beers by 4c, which pub chiefs say will translate to a 10c rise at the taps.

That means the average price of a Guinness in Ireland will jump to over €5.60, while Smithwicks and Carlsberg will set customers back €5.65 and €6.10 respectively for a pint.

The latest 4c increase from Diageo follows a 12c hike in February - rises the drinks giant insists are necessary due to increased input costs across its business operations in Ireland.

On top of that, a special low VAT rate of 9 per cent - which was brought in to support hard-hit publicans during the pandemic - is due to end next month, meaning pubs will soon be charging 13.5 per cent VAT on food products.

Beleaguered pub representatives, many of whom are already reeling from previous hikes and rising energy costs, have warned that many of its members are now at "tipping point" in their battle to save their bars from closure.

The Vintners Federation of Ireland - a body which represents publicans outside Dublin - criticised the "poor timing" of the price hike announcement, and described the move as "deeply unfair to both consumers and publicans".

Martin Harley, a VFI representative and a Donegal-based publican himself, said: said: "The overheads are the same whether you're in Dublin or in Donegal. It's driving people into off-licences. People are drinking at home, which is not a healthy environment to be in, either."

His views were echoed by Tipperary-based publican John Harney who vowed not to increase his prices at the tap for fear of losing customers.

In an interview with Newstalk radio, he said: "The fear I have is if publicans just keep increasing the costs the whole time, the punter who's coming in paying for it will decide they’ve had enough."

Cork VFI chairperson Michael O'Donovan also admitted he was worried about the increased threat of pub closures.

He told The Irish Daily Star: "The increase in the price of a pint and the VAT hike in two weeks' time is a concern. People are being careful about what they spend and when they spend it. Many pubs now don't have a buffer. They are operating with tight margins."

He added: "Publicans are definitely concerned if it's viable to keep the business going. They have low margins, so a 4.5 per cent VAT hike is challenging.

"My concern is that, when you take the increases together, it threatens a tipping point for the sector."

Between 2005 and 2021 a total of 1,829 mainly rural pubs closed across Ireland.