Business Irish

Monday 25 September 2017

Pubs have a real social role in any economic revival

Don't believe the hype -- it's not all about smartphones and big pharma. The 'old reliables' have their part to play in Ireland's economic resurgence, writes Niall Phelan of Molson Coors

'The drinks industry is a major user of domestic raw materials -- and it contributes to the value of over €500m...'

AS BOTH the country manager of one of the world's largest brewing companies and the son of a publican, you may not be too surprised to read of my belief that your local pub has a genuine and integral role to play in Ireland's recovery -- both as an economic and social engine.

No, this is not a shameless attempt to advance the responsible sale and consumption of Molson Coors products -- though I have nothing against that either -- but what I do offer is some alternate thinking on the positive social role that the network of over 7,000 pubs nationally has to play in our country's recovery.

Let me be clear from the outset, the consumption habits and approach to sale of alcohol in our country is changing and needs to continue to change. The role of pubs in that dynamic also needs to change; both for reasons associated with the recession and also as part our society's natural evolutionary process. Molson Coors Ireland recently undertook extensive all-island research into the pub trade which revealed that publicans are already innovating and changing to address both these factors -- but more on that later.

What I am advocating is that, more than ever before, we need our pubs both as significant local economic engines and, perhaps even more importantly, as vital social organs in our communities. At a time when there is precious little to feel good about, we need to open our minds a little to how, in a simple and responsible way, our pubs have a part to play in nurturing the damaged social fabric that currently prevails.

Before I focus on the social needs alluded to, allow me to clarify the scale of the economic contribution made by the drinks sector, including the pub trade, both locally and nationally:

• The drinks sector employed approximately 64,000 people in 2011, many of whom are in pubs in rural areas.

• The alcohol VAT and excise yield is €1.8bn.

• The drinks industry is a major user of domestic raw materials and contributes to the value of over €500m.

• The drinks industry provides essential economic and tourism infrastructure through the extensive and geographically spread network of the 8,525 public houses, hotel bars and other bars.

• The pub is the most widely used facility for meals by foreign tourists and is a substantial element of the tourism experience and product.

Much more has been written about the economics of our situation and the potential solutions to those issues, but a lot less has been written about the psychological damage endured and how to repair it. Last year, in a speech delivered in the United States that reflected on Ireland's difficult economic times, former US President Bill Clinton said: "And here's what I think: number one, there's an economic problem, but I also think that getting through the economic thicket requires us to deal with the profound damage to the Irish psyche done by this collapse."

Later, as part of the same address, President Clinton said: "The thing we always loved about Ireland had almost nothing to do with whether it was financially successful or not. It was what it was at the core. Ireland will be great and prosperous and wonderful again, simply by recovering what it is at the core."

I'm not trying to suggest that President Clinton was pointing to pubs as the panacea for our damaged psyche and a conduit to economic recovery, but I do put it to you that a small part of our society's 'core' was and still is the sheer camaraderie and companionship that is facilitated by and flourishes in the pubs in our cities, towns and villages. That part of our core is under huge pressure following the economic and regulatory changes of the last decade. We need to recognise and nurture what is good about it, while continuing to adapt and improve the pub's offering for the standards and values of today's society.

The American urban sociologist Ray Oldenburg stresses the importance within modern societies of the so-called 'third place'. This is a location that is not work and not home: rather a public place where people can easily meet, relax and interact. Such 'third place' locations include not just pubs, but coffee bars, hairdressing salons, internet cafes, public libraries, and other similar but culturally specific locations. They are typified by their open, democratic nature, informality and ubiquity. Oldenburg believes they are a major contributor to the maintenance of social capital and of healthy community life.

In an era when banks, post offices and other 'third places' are retrenching, especially in rural Ireland, it is arguable that the social role of the pub is now more important than it has been since the early 19th Century when there were over 21,000 pubs nationally. In those days the pub was the primary local centre for trade, transport and even political organisation. What's to say that a new political force for change won't emanate from some initial meetings in pubs around the country?

We don't really need sociologists and historians to define and explain the value of being able to go to the pub, or other 'third place' venues. Neither do we need economists to explain that our modest transactions go towards supporting much-needed local incomes and trade. We all intrinsically understand the simple pleasures and benefits of time responsibly spent (by the vast majority) in our local, but it is not often spoken of publicly because it is politically incorrect to do so.

Neither am I suggesting that pubs are perfect as they currently are, but they are trying hard to adapt and survive. National research undertaken by Molson Coors Ireland in April this year shows that Irish pubs are evolving in an era of unprecedented social, economic and regulatory change. Increasingly, pubs are offering what is available in mature European societies where alcohol is enjoyed responsibly and joined as a key offering by hot food and other beverages such as coffee and tea.

Despite two-thirds of pubs surveyed reporting that their sales figures decreased either a little or a lot over the past two years, no less than 61 per cent of respondents said they have invested signifi-cantly in developing, extending, or refurbishing their pub during the past five years. Of these, 73 per cent invested up to €500,000 and 80 per cent believe the decision to invest has been worthwhile.

Publicans are also innovating to try and stem declining sales by advertising online, offering live entertainment, sports broadcasting, new food offerings, staff training, and stocking of craft beers. Seventy-three per cent of those who made changes believe that they had a sustained positive impact on sales.

The pubs are being driven on by both a dwindling and fussier clientele, 63 per cent of whom go to their local less than they did two years ago, but 86 per cent of whom would visit their local more frequently if pubs offered features such as free Wi-Fi, better food and entertainment.

Molson Coors is a leader in the global brewing industry. We decided to invest in Ireland by establishing Molson Coors Ireland, in 2010. That was long after the recession hit. To date we have invested €21m and created 46 direct jobs and are supporting a further 20 indirectly.

We are investing because naturally we believe in what we have to offer, but also because we believe in the deeply ingrained and overwhelmingly positive role that pubs have always and will continue to play in the social fabric of Irish society.

Niall Phelan is Country Manager of Molson Coors Ireland

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