Business Irish

Saturday 27 May 2017

Battle lines drawn over booze

Consumer chief hits out at pubs over price complaints

Declan O'Dea, co-owner of The Lotts bar in Dublin, who has let five staff go in the past week, cites rates, the recession and bad weather as major problems
Declan O'Dea, co-owner of The Lotts bar in Dublin, who has let five staff go in the past week, cites rates, the recession and bad weather as major problems
Ailish O'Hora

Ailish O'Hora

Publicans were told yesterday to stop blaming others for the decline of the pub.

Fed up with steep prices for alcohol and rip-off charges for soft drinks, many consumers have simply stopped using pubs.

Yesterday, the Consumers' Association of Ireland (CAI) stepped in to counter suggestions by bar owners that supermarket sales are to blame for the alarming drop in the number of licensed premises.

The CAI rejected claims by the Vintners Federation of Ireland (VFI) that the availability of cheap alcohol in the big retail outlets is killing their business.

New figures show the number of pub licences issued in the past five years has fallen by 1,300, with the industry putting the lion's share of the blame on cheaper supermarket prices.

Some of the worst hit areas include Dublin, Cork, Mayo, Kerry and Limerick.

The VFI cited below-cost selling in supermarkets as one of the main causes for the downturn in the industry, although it admitted the smoking ban and stricter drink driving laws have also hit sales.

Supermarkets and other retailers have been able to sell goods below the cost they pay for them since the lifting in 2006 of the Groceries Order, which forbade the selling of grocery items at below-cost prices.

Yesterday the VFI demanded that a minimum price be set on alcohol sales -- saying it was the only way pubs would survive competition from supermarket sales of alcohol.

But Dermott Jewell, chief executive of the CAI, said it was time for vintners to face reality and drop their prices further in light of the recession. He said there were many reasons why the pub business was in decline, including high prices in bars.

Overheads

"Their products are too expensive -- that's why less people are going to the pub," he said.

"Now they are blaming the supermarkets and before that it was the smoking ban. The issue is one of lack of affordability -- people have lost their jobs and those who are in employment are not spending."

According to VFI president Gerry Mellett, its members believe that supermarkets are killing the pub business.

"That's the feedback we're getting. We've all cut costs but we can't afford to drop prices any further. Our overheads like rates and insurance are fixed and there's no flexibility," he said.

Mr Mellet added that the latest figures from the Revenue showed there were 7,616 pub licences in 2010, down from 8,992 in 2005. And while the drinks market has increased by over 6pc in the first half of 2010, sales in pubs around Ireland have fallen by almost 15pc.

"This is definitely being driven by the supermarkets," he added. "We just can't compete."

One publican, Declan O'Dea, co-owner of The Lotts bar and Bachelor Inn pub in Dublin's city centre, said yesterday that he had to let five staff go in the past week.

Mr O'Dea said business was being crippled by a number of issues including commercial rates, the recession and the recent bad weather.

"Between the two pubs we employ 37 people but we are constantly under pressure to reduce costs," he said.

Also yesterday, it emerged that a number of pubs in Galway city have closed with the lose of 85 jobs.

Cuba, on Eyre Square, the Cellar Bar and Harvest offlicence, all part of the Jona Group, have gone into voluntary liquidation.

According to Torlach Denihan, director at IBEC's Retail Ireland, singling out supermarkets was not a fair representation of what was happening in the market.

"It's dubious," he said. "The reasons for the decline in the market are multi-faceted including the downturn in the economy. All retailers are in a challenging market and nobody is immune."

Irish Independent

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