On three occasions the Government signalled a date on which ‘wet’ pubs and pubs serving food would be permitted to reopen after the extended lockdown and on each occasion these proved to be false starts giving very short notice to businesses that they were indeed not permitted to reopen after all. This left many with extensive stocks of beer and food purchased from suppliers, while customer bookings had been made and staff had been rostered.
The industry estimates that the cost of each of these false starts stands at up to €20 million in terms of beer and food stock. In Dublin alone, each false start cost up to €7 million in wasted beer stock for Dublin pubs states the DIGI.
This is in addition to the investment businesses had and continue to make in preparing their premises to reopen including cleaning, PPE equipment, staff and wage costs.
A recent survey of publicans showed that almost half took on €16,000 in debt during lockdown to cover staff and business costs, with one in five taking on as much as €30,000.
“Drinks and hospitality businesses have endured the longest lockdown in the EU and the short notice nature of the Government’s three failed pledges to reopen the industry is crippling businesses who’re incurring costs with no means of recouping them,” said DIGI Chair Liam Reid, “€60 million is only the tip of the iceberg while we risk a credit crisis in the industry where product is written off and credit terms are reviewed – a situation we need to avoid.
“Dublin publicans, whose businesses have been caught in the government’s costly and unpredictable stop-start lockdown strategy, will endure further financial strain for the next period of weeks or it could be months, we don’t know.
Government policy an outlier compared to other European countries
“The key challenge for the industry right now is that current Government policy is an outlier compared with other European countries. Ireland is closing far more of our hospitality sector and for far longer. If this approach is maintained and we fail to explore other ways of living with Covid and operating our businesses, it will cause long-term and irreparable damage to the sector. The Government needs to urgently look at what other European countries are doing and adapt the current approach.”
A recent report suggests that as many as 63% of all Accommodation and Food Services jobs in Ireland, 114,000 in total (including jobs in pubs, restaurants and hotels), could be lost by year’s end without further supports.
The DIGI is calling on the government to aid the drinks and hospitality industry by removing barriers to business and deliver a comprehensive package of measures to support their recovery.
“We need to consider how best to reopen these businesses and in tandem, focus on the recovery,” stated Liam Reid, “We must ensure we do all we can to make it as easy as possible to operate within Covid guidelines and support the recovery of this sector and our economy.
“Central to this is jobs and this industry has proven capacity to create and maintain employment. The hospitality sector helped lead Ireland out of the 2008 recession when one in seven jobs created during the recovery was in this sector. The drinks and hospitality industry can support the recovery now also but needs to be supported to do so. We can do this through using policy measures to deliver targeted support that will have an immediate effect.