Ireland’s 7,400 pubs have debts of just over €2 billion

Ireland's 7,400 pubs have combined debts of more than €2 billion and are continuing to feel the pinch from the recession, according to a report on the sector by AIB in conjunction with the Licensed Vintners Association (LVA) and the Vintner's Federation of Ireland (VFI).

That equates to €270,000 per pub and excludes lending for other purposes that might be secured on a bar.

According to the report, 53 per cent of respondents said they had a good relationship with their bank while 18 per cent said it was “poor”. Half of all pub owners said their main bank did not make them feel like a “valued customer”.

This was noted by Padraig Cribben, chief executive of the VFI, who said banks have reduced or even removed credit facilities and overdrafts from a number of pubs in recent years, while also increasing the fees for lodging cash.

'Different attitude'
"The pub trade needs to see a different attitude and level of engagement from the banks," he said. "Hopefully, banks don't want to end up running pubs – the experience of receiverships and examinerships has been unpleasant for all concerned so far – so they need to provide the right level of support."

AIB declined yesterday to say how much funding it provides to the sector but claims its share is “approaching 50 per cent”.

It found that 30 per cent of pubs increased turnover last year but that 50 per cent recorded a fall in sales.

Sixty per cent of publicans believe it will take more than five years for the industry to improve. The top three concerns for owners are local authority rates, the availability of cheap alcohol in supermarkets and rising labour costs.

The report found that one-third of customers are under 30 and that 43 per cent of publicans are not targeting this market. About 17 per cent of customers in Irish pubs are tourists.

'Consumer demand'
In value terms, bar sales in Ireland have declined by 28 per cent since 2005 while 11 per cent of pubs have closed.

About 50 have closed in Dublin in the past five years. Donall O’Keeffe, chief executive of the LVA, said he does not expect more closures in the capital.

“I’m confident that 730 pubs are sustainable in Dublin in the medium term,” he said.

However, Mr O’Keeffe said there was “simply not enough consumer demand” to sustain 7,400 pubs and 1,000 hotels nationally.

Irish market research company Amárach polled 200 publicans across the State for the report, including 75 in Dublin.