Pubs inject €2m a year into local economies

Describing pubs as ‘incubators for socio-economic activity’ Dr Ignazio Cabras of the University of York School of Management, has pointed out that throughout literature, pubs were united by some common themes and issues.

In his VFI-commissioned report ‘The role of pubs in creating economic development and social wellbeing in rural Ireland’ he and Dr Matthew Mount of the Kent Business School at the University of Kent in Canterbury describe the impact of pubs on local economies and rural communities throughout the country.

Pubs offer positive themes in that they’re also ideal places to foster civic engagement and involvement, they enhance community cohesion at a local level, they provide economic opportunities (often related to business diversification) and are one of the markers of the urban/rural divide.

Unlike the situation in the UK where some 57% of the pubs are group-owned, here nearly all pubs are privately owned or family-run. In a large proportion of cases the owner publican constituted the total employee number at the pub.

He pointed out that between 2006 and 20012 some 7,000 jobs had been lost in the on-trade sector.

 

Main issues

Nearly half of nearly 300 pubs surveyed here indicated a 60% plus ratio of costs to turnover with more than three in five indicating a 50% ratio and above.

The main issue of concern to rural publicans has been increased costs versus decreasing revenues and the disappearance of traditional customers.

Pubs have become less attractive during the week compared to previous years. While the smoking ban was not significant, tougher drink-driving regulations without transport alternatives for rural pubs had been bad for business.

“Publicans are regarded as the sentinel of the community,” stated Dr Cabras.

“Pubs are a reputable source of employment in rural Ireland,” he said, “especially for workers at the point of entry,” he told a conference in Dublin earlier this year.

There were over 5,700 jobs to be had in serving in pubs, 40% of them full-time.

Through working with the VFI he’d extrapolated that the VFI’s members pay out €60.7 million a year in employee wages.

He also extrapolated that some €2.1 million a year is injected into the local supply chain.

“Each pub injects €600 into the local economy each month in goods and services provided by local businesses,” he said, adding that, “Initiatives and events have an increased chance of success if supported by publicans.

Pubs are also seen as essential information hubs, he concluded.

To help the pub survive, the local community should have the power to protect the local pub from development as had lately become the case in the UK.

This report is covered in more detail in the November issue of  Drinks Industry Ireland magazine.