Opinion

Lights out this Winter?

As energy price increases continue to sweep across a shell-shocked consumer and business community, many pubs must now be looking at the prospect of closing their doors having seen commodity price rises chase energy prices. This at a time when consumers are cutting back on on-trade spend as they feel the cost-of-living crisis grip their own wallets ever tighter.

At time of writing Eirtricity has raised its prices by 40%; that’s on top of three previous price rises taken in the last 12 months.

The undeniable outcome is that we are all – publicans, distributors, wholesalers, importers, exporters, breweries and distilleries – caught up to our necks in the rising vortex of costs which must be passed down the line to the eventual consumer.

Question is, how much more give is there in the price elasticity of the consumer’s pocket?

All this makes the economic damage done to the on-trade by the pandemic pale into relative insignificance.

As VFI Chief Executive Paul Clancy told the Irish Mirror, “There is no doubt pubs across Ireland are facing an extremely challenging Autumn and Winter period”.

While it’s of little consolation, internationally, we’re all in the same leaky boat.

The British Institute of Innkeeping recently revealed the results of a flash survey of members on the devastating impact of the rise in energy bills.

It found that one in two businesses will now be loss-making and a massive one in three of those businesses will fail in the next three months.

“The effect of these unprecedented energy price rises on our nation’s pubs has now reached a critical level,” said BII Chief Executive Steve Alton, “This is not just about business failure and the loss of livelihoods for our members, it’s the loss of jobs in local communities.

“We’re calling on Government to provide a meaningful cap for business energy as well as grant support for our essential safe spaces for all across the UK. We’re also calling for at least a 50% reduction in business rates for 23/24, as well as a significant cut in duty for draught beer and cider of at least 20% on containers of 20 litres or more to allow them to begin to recover their businesses.

“These measures alongside a reduced rate of VAT, encouraging consumers to continue to visit pubs during this cost-of-living crisis, will be essential to ensure their survival.”

Irish pubs would echo that sentiment.

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