Survey shows rural publicans feeling the pressure amid rising cost of doing business
- Energy, staffing, taxes and insurance identified as biggest cost drivers.
- Publicans call for reduction in excise duty in upcoming budget.
A new survey of publicans has found that 44% of rural pubs have seen their business costs rise by over 30% with energy, staffing, taxes and insurance listed as their top four annual costs.
The survey, carried out among members of the Vintners Federation of Ireland examined the factors contributing to the cost of doing business.
When asked to rank which costs are causing greatest concern, energy bills were cited highest (96%) followed by staffing (66%), taxation, including business rates and excise duty (63%) and insurance (56%).
It follows a recent report from the Drinks Industry Group of Ireland (DIGI) which found that almost 2,000 pubs have closed across the country since 2005 with rural premises most at risk of shutting their doors.
Publicans say the current high cost of doing business is impacting long term viability with 44% experiencing cost increases of over 30% and 24% seeing costs rise by between 21% and 30%.
Despite the difficult cost environment, rural publicans are continuing to invest in their premises, with 44% investing in capital expenditure and 36% adapting their businesses in the past year.
Donegal Publican, Martin Harley says that he is not surprised by the findings in the survey:
“I can tell you firsthand how difficult it is becoming for pubs like ours to sustain the soaring costs associated with running a premises.
“The Government is in a position to make decisions which can, in a real way, help small local businesses. Rural pubs like ours are at the heart of towns and villages across Ireland. One measure they could take in the upcoming Budget is to reduce excise duty to ease the cost of doing business. In the long term, rural and family run pubs, which are already under pressure due to the rise in VAT this month will continue to struggle without action from Government.
Cathal Sheridan who runs a pub in Milltown, Galway says there is an immediate need for Government intervention:
“We were one of the lucky ones who managed to keep our doors open following the covid pandemic and while some pubs have rebounded since then, many are still struggling. There are measures the Government can take to help pubs like ours and they can afford to do it.
“The excise duty on drink in Ireland is the second highest in Europe. It is simply unsustainable for so many like us for whom the local pub is not just a business, it’s a place for communities to gather, for family and friends to meet. It’s a distinctive part of our culture and our heritage.”