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Publicans hit by perfect storm may have to call time without State aid

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Cheers: Kaitlin McMahon, business manager of Johnnie Fox’s pub, in Glencullen, ahead of the reopening. Photo: Gerry Mooney

Cheers: Kaitlin McMahon, business manager of Johnnie Fox’s pub, in Glencullen, ahead of the reopening. Photo: Gerry Mooney

Cheers: Kaitlin McMahon, business manager of Johnnie Fox’s pub, in Glencullen, ahead of the reopening. Photo: Gerry Mooney

For generations, having a pub in the family was a valuable asset, and a guarantee of a decent income, in good times and bad. But the pub business has been hit by a "perfect storm" of lifestyle changes and increasing costs. Now, the pandemic lockdown has seen the hospitality sector hardest hit. And with the planned reopening of pubs this week now deferred, what is the future for Ireland's pubs?

The last economic collapse would have been bad enough for publicans, but the smoking ban and a stricter regime of drink-driving enforcement made business more difficult, and saw the market split into two distinct sectors - urban and rural. Lifestyle changes, such as reducing alcohol consumption and a big increase in drinking at home, hit turnover too.

Nonetheless, the recovering economy saw business improve significantly, particularly in urban locations, and where publicans added a good food offer. Pub values recovered considerably and the notable deal this year was the sale of The Storehouse, Temple Bar, reported at €15m, and completed just before the lockdown. Confidence was returning, with good interest in city centre pubs, in particular. In rural locations, however, demand remained very limited, and many provincial towns have too many pubs.

Now, however, there is uncertainty about how pubs will reopen. Will many pubs be viable at all, with their capacity greatly reduced by social-distancing measures? Will customers, now over four months without visiting their pub, return in the same numbers? Will customers feel safe to return? Will the regulations around visiting a pub remove the enjoyment from the experience?

The market, no doubt, will wait to see what happens.

What will the "new normal" be like? All publicans have to renew their licences in September, and another uncertainty out there is whether gardaí will be objecting to renewals for the small minority of pubs that reopened serving food but did not adhere to the reopening regulations.

On that score alone, I don't see any pubs being sold before the autumn.

The planned reopening on August 10 is far from a certainty, and will depend on the trends in infections. But on reopening, publicans are going to have to grapple with a viability based on lower numbers of customers, and increased costs from complying with hygiene measures. Small city pubs may not be able to reopen at all, due to the inability to comply with the social distancing measures, and putting tables on the street is only an option for a few more weeks.

The regulations throw up several "hard-luck" cases and I have huge sympathy for small rural pubs, which seem to be able to survive with very few customers during the week, at least, and which could socially distance but cannot open. Ironically, hotels, which have large lounges and function rooms, and could easily socially distance, can't open their bars to the public either - only to residents.

Serving good food will become increasingly important and I can see the larger suburban pubs becoming more popular, due to their space, and a reluctance to use public transport. That said, some suburban pubs with large car parks will become more valuable as development sites - probably for apartments.

Pubs are an important part of our culture and tourism offer. I fear that we will lose a lot of them unless they get a VAT reduction, a rates reduction and a solution to the public liability insurance fiasco, to see them through until normality returns.

Irish Independent