Draining the pub trade
Vintners say the combination of high taxes, high insurance, inadequate rural transport and a vociferous health lobby is forcing pubs out of business at an alarming rate. Brendan Keane reports
A leading figure of the national Irish Vintners Federation (IVF) has told this newspaper that the drinks industry here is under a sustained 'attack' from sections of the Government and the HSE.
A report published last week by the Drinks Industry Group of Ireland (DIGI) revealed that between 2005 and 2018 there was a reduction of 13.8 per cent in the number of pub licences renewed in county Wexford.
Tom Dunbar, who runs a pub in Ferns, is the Vice-Chairperson of the IVF in Wexford and is also a member of the organisation's national executive committee, told this newspaper that 'a number of factors' are feeding into the problems faced by those operating within the drinks industry.
He said there is a 'stark difference' now to when it was regarded as good business practice to buy a pub.
He said there are people now faced with a catch 22 situation whereby they can't afford to stay running a pub but also can't afford to get out of the industry.
According to the DIGI report 20 per cent of rural pubs closed across the country between 2005 and 2018 - equating to 1,535 premises.
In comparison just 1 per cent of pubs closed in Dublin during the same period.
'Some of the laws imposed have been completely over the top, in my opinion, and they have certainly had a detrimental affect on rural areas,' said Mr Dunbar.
'There is a health lobby and the HSE is consistently advertising on radio and it's all anti the industry,' he added.
'There is no positive slant put on it at all.'
Mr Dunbar said there are around 250,000 people employed directly and indirectly within the drinks industry.
'I have worked in the industry all my life,' he said.
'Pubs are a tremendous draw for tourism and people from other countries are attracted to pubs when they're here.'
Mr Dunbar said taxation and excise rates in Ireland are 'way too high' within the industry.
'We have the second highest tax rate in Europe,' he added.
While there are no quick fix solutions Mr Dunbar said an immediate reduction in excise tax should be introduced as a first step to helping address the problems faced by vintners.
'A reduction of 7 or 8 per cent would help as a start,' he said.
'We are four-and-a-half times higher than the tax in France for excise and eight-and-a-half times higher than Luxembourg.'
Mr Dunbar said that in 2017 Ireland's beer excise rate was 11-and-a-half times higher than that of Germany.
'That has a hugely detrimental affect,' he said.
'I definitely think there is a movement [in Government] and the HSE to demean the business,' he added.
'I think there are certain sections that would like to introduce prohibition like there used to be in America.'
Mr Dunbar went on to say: 'That might seem a little over the top but there has been an incessant attack on rural areas and that's why there are a lot of closed pubs.'
He also said lack of adequate transport in rural areas is another factor contributing the problems faced by the industry.
'Insurance is another issue and within our business it's a huge concern,' he said.
'It's increasing all the time and all of those things feed into the issues facing our business,' he added.
'We are getting no help at all from the Government.'
The former national president of the IVF, Joe Browne, also commented on the matter to this newspaper.
'When I was President we had 11,500 members and now there are around 4,200,' he said.
'That's national members and those figures speak for themselves,'he added.
'It's cheaper to buy a pub now than a house and that sums it up really.'
According to the DIGI report 71 rural pubs closed in 2018 and it says that is 'a stark reminder of the pubs continued decline in rural Ireland'.
Significantly, the report also indicated that despite the closures the drinks and hospitality sector enables 8,070 jobs and €143m in tourism spend 'in the constituency'.
Ireland has the second highest overall excise tax in the EU, the highest tax on wine, the second highest on beer and the third highest on spirits.
Rosemary Garth, who is the Chairperson of the DIGI and director of communications and corporate affairs at Irish distillers, also commented on the report and said Brexit poses an additional risk to the industry.
'With the new very real prospect of a no-deal Brexit, Government action and support have never been more important,' she said.
The DIGI is calling for the Government to reduce alcohol excise tax by 15 per cent over the next two years.
'Ireland's rural pubs have been on a steady decline for years, despite their immense importance and contribution to local communities across the country,' she said.
'Our high alcohol excise tax has played a role in this and the DIGI is calling on the Government to take action.'
Ms Garth went on to comment: 'Easing the financial burden of excise tax over a two-year period is a clear signal of support and encouragement to these businesses in a time of economic uncertainty [and] with the now very real prospect of a no-deal Brexit, Government action and support have never been more important.'