A group of more than 200 publicans, who are starting a "virtual wholesale company" to buy drinks products mostly through the Internet, have predicted it will translate into cheaper prices for Irish consumers.
Prominent publicans who have launched Bartrader.com yesterday claimed their company was "about using their purchasing powers and achieving efficiencies for both suppliers and retailers in the bar, hotel and restaurant trade".
Mr Hugh O'Regan of the Thomas Reed Group, owner of 17 bars in Dublin, claimed that in response to the move Guinness Ireland was about to discount the price of Guinness to try to thwart their new company, which has contracted 211 publicans so far and approached more than 1,000.
Mr O'Regan with Mr Louis Fitzgerald of the Fitzgerald Group and Mr Liam O'Dwyer of the Capital Bars Group have devised the idea to combine their purchasing power and that of other publicans who wish to join them. Mr Mark Skelton, formerly of Murphy Heineken Ireland, is commercial director, and Ms Barbara McCrory, a former buyer with Tesco, is also on its board.
Mr O'Regan was confident the group's purchasing power would result in price reductions within three to four weeks. Once it had a critical mass, "group purchasing techniques" would get better pricing, "with the understanding that some of the reduction must be passed on to customers [the public]". Publicans would be able to use Bartrader.com for all their purchasing needs.
At the very least it would lead to drink-price reductions by bigger publicans and a price freeze by smaller publicans, he said.
There was a perception that publicans were achieving exorbitant profit margins, Mr O'Regan said, but he denied this, notwithstanding a pattern of drink price increases.
Asked why they had started the venture now, he said combined purchasing power in other sectors, such as supermarkets, indicated that considerable efficiencies could be achieved. Guinness offered "progressive scale discounting" to publicans based on their size of business.
A spokesman for the Guinness Ireland Group said that as it had not been approached by Siteway Ltd, which owns Bartrader.com, and did not know the details of the company's proposals, it did not wish to comment.
Asked if it was about to discount the price of Guinness in response to Bartrader.com, he said it did not wish to comment for the same reason. "Our trading terms are in place. The trade is very much aware of them."
Mr O'Regan rejected suggestion that publicans could already achieve a 400 per cent mark-up on products and insisted the formation of Bartrader.com, which would be run as a commercial company, would not conflict with competition legislation.
The company had had meetings with publicans in different parts of the State which, he insisted, were open and not secretive, as one newspaper had said.
