Pubs under pressure

Fri, Aug 30, 2013, 01:00

Irish people last year spent € .6.3 billion on alcohol, as an increasing number drank at home and fewer consumed their beer, wine or spirits in public houses. Alcohol consumption has declined by almost one fifth since it peaked in 2001.And this underlines the huge challenge now facing many of the country’s pubs. A report by AIB, in conjunction with the Licensed Vintners Association and the Vintner’s Federation of Ireland, shows the pub sector in poor financial health. Ireland’s 7,400 pubs have debts of over €2 billion.

Too many pubs are chasing too few customers who are spending less. And, because many of these pubs are heavily indebted, more pub closures are inevitable. In the drinks price war, pubs have lost out to off-licences and supermarkets, where alcohol – sometimes sold at below cost – is cheaper to buy, and easily available. Already some 11 per cent of pubs have called time, and closed their premises, while bar sales have dropped by more than a quarter since 2005. The licensed trade’s financial difficulties have also become a pressing concern for the banks, given their heavy loan exposure to the sector.

The challenges facing pub owners in the cities are, perhaps, even greater in rural areas. There, links with the local community are stronger and the pub, in addition to its traditional role, often serves as a meeting place and social centre. But there too the impact of recession and emigration, in depressing consumer demand, has taken its toll on trade. And tougher drink driving laws have also discouraged those in remote areas from driving to their local bar.

Nevertheless, some pub owners have shown that the licensed trade can indeed be profitable, when customer needs are identified, and satisfied. One Dublin publican recently attributed his companies’ rising profits last year to a rebranding of his bars as “sporting emporiums”. His pubs exploited Leinster’s Heineken Cup success to attract extra viewers and drinkers. Other pub owners need to show a similar sense of initiative, and spirit of enterprise.

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