Pub sector in “crisis situation”
The on-trade’s 14.1 per cent decline in trade in the first seven months of the year has been put down to the weak economic environment by the Drinks Industry Group of Ireland.
However the DIGI also said that the Government’s excise reduction as part of Budget 2010 has had the desired effect of stemming cross-border alcohol purchasing, noting a 6.4 per cent increase in overall alcohol sales recorded in the first six months of 2010, driven exclusively by double-digit growth in off-sales and offset by strong declines in the on-trade.
“Last year DIGI consistently pointed out that Ireland’s high levels of alcohol taxation was a key reason why many consumers were opting to travel to Northern Ireland to do their shopping and called on the Government to address this by reducing excise,” pointed out DIGI Chairman Kieran Tobin, “Their welcome decision to do so has clearly worked.”
The DIGI will work with the Government to identify further stimulus measures in this December’s Budget to boost the employment-intensive hospitality industry in order to prevent closures and save jobs.
Despite the slowdown in cross-border shopping for alcohol, pubs, bars and restaurants continue to suffer “unprecedented sales” according to DIGI Secretary and LVA Chief Executive Donall O’Keeffe.
“The 14.1 per cent decline in the value of pub sales in the first seven months of 2010 comes on top of an 8.8 per cent decline in 2009,” he commented, “Of particular concern are the ongoing prospects of weak consumer demand for the immediate future and the ongoing cost pressure being generated by Government-related costs such as commercial rates and regulation. As a consequence, the sector is in a crisis situation.
“This is part of a wider trend of decline in the on-trade over the last decade that has seen the volume of bar sales fall 25 per cent since 2000.
“In the short to medium term there is absolutely no sign of market conditions improving for the pub trade,” he added, “Rather the likelihood is that current trends will continue forcing many publicans out of business and thousands of subsequent job losses.”
While the drinks market has grown and cross-border sales have decreased, the overall situation remains extremely difficult for a key national industry that continues to support 80,000 jobs and provides almost €2 billion in VAT and excise revenue to the State, concluded Kieran Tobin.
