Enterprises across the county are facing previously unimaginable increases in their electricity bills, with many owners saying the increases are unsustainable and that without urgent government intervention the future for their businesses is a bleak one. Stephen Holland reports.
Dramatic price hikes in gas and electricity have left Sligo businesses facing unprecedented bills with many business owners stating without urgent Government intervention there will be widespread closures and unemployment as the country heads towards a major crisis situation.
Finbarr Filan, the owner of Centra on Castle Street in Sligo, stated that he will soon be facing an energy bill of over €11,000 per month whereas prior to this it was around €3,500. He said this is entirely unsustainable and he fears not only for his own business but for every business owner in Ireland.
“I am part of Centra and we are currently in the lucky position to still be in an affinity deal but that will run out in October. I am currently paying a rate of around 12c per unit during the daytime and 7c for night-time, but when this runs out it will be a blended rate of around 40c bringing my bill to around €11,000,” he said.
“That’s not just for me, it’s any type of business that is using energy like restaurants, convenience stores, butchers, anywhere that provides food will have heating and cooling costs. In my case, I have 22 fridges and that’s a small store so you can imagine the costs a SuperValu, Tesco, or Dunnes are facing”
Finbarr’s affinity deal has so far shielded him from the worst of the energy increases that businesses and households have been facing over the last number of months, however that protection will not last much longer and he says it is imperative that the Government step in to resolve this international crisis.
As a member of the Irish Small and Medium Enterprises Association (ISME), Finbarr says this is an issue they have been highlighting since as far back as last April.
“This is a silent crisis and it has snuck up on people all of a sudden, it’s only when they open their bill they say, ‘oh my God!’.
“Things do seem to be moving in the right direction for the Government to step in, and they’ll have to step in with Covid-type supports for businesses,” he said.
“Every business in the country is being affected by this.
“The Government has two options: They don’t do anything and there’s wholesale closures and unemployment or they maintain society. In fairness they are working on it and these things do not happen overnight, there have been signals that something will happen in the budget and this is also being dealt with at a European level, but we really need this sorted in the next couple of weeks.
“This is horrendous for anyone not on a deal like the one I’m currently in, and I’m out of that in six weeks. There’s huge pressure and stress and it’s not fair because it’s not a crisis of business owners making, it’s an international crisis.”
With some businesses facing energy increases of more than 400%, Finbarr says the situation is not just ‘unacceptable’ it is simply ‘not viable’.
“We’ve had inflation and there’s been small increases that we’ve all been working really hard to sort, deal with, and manage, but when it goes from €3,000 to €11,000, €12,000, or €13,000 that’s not manageable,” he said.
“It’s not as if we can turn off our fridges to save electricity, we can’t and most businesses have already over the last number of years been working to implement more energy efficient models and more energy efficient practices because of all the other rising costs.
“We’re working on high efficiency lighting, fridges, lights going off when there’s no one in the area, that’s all being done by most businesses so that’s why there’s no other options.”
Finbarr says that urgent action is needed and measures such as reducing or eliminating VAT will be insignificant in the face of the magnitude of what businesses are currently dealing with.
“Bringing the VAT to zero might save 5-6% on your electricity but it’s not going to save 400%.
“If my bill goes from €3,000 to €11,000 that means my VAT is around €1,000, it still means that my bill is €10,000, VAT is not the issue,” he said.
The only solution, according to Finbarr, is for the Government to address the problem head on and implement emergency measures similar to the pandemic to ensure small businesses can stay afloat.
“When Covid happened, everyone was in a horrendous state and wondering how we will survive.
“Our own Government and those across the world stepped up to the mark and ensured people were able to continue to live and stay in business,” he said.
“They need to do the same again, it’s unfortunate that we’ve had two crises one after another, but that’s the way the cookie crumbles.”
Cecil Whiteside, the owner of SuperValu in Ballisadare and Centra in Collooney, can testify to the huge amount of energy that’s needed to keep a supermarket running.
He says that in the last year his bills have more than doubled with his rate going from 22c to 45c per unit with his last monthly bill for the two supermarkets costing a whopping €47,000 which is up from between €16,000 and €20,000.
“In our two shops we would have been paying less than €20,000 last year, you are buying electricity on the wholesale market and it’s not a fixed rate.
“A lot of shops around the country will getting out of a fixed rate scheme at the end of September,” he said.
“We’re all having the same problem and we had a meeting with a couple of TDs to explain to them that this needs to be brought to higher powers.
“I don’t think they even realised how much power a supermarket uses on a monthly basis.
“We have to unite on this because it’s concerning.
“I can sustain it for a short period of time but if this is happening in six months’ time I am in trouble, we can’t add it onto the customers it does not work that way so we are trying to absorb it as much as we can.”
Cecil explained that in his SuperValu store they have ten 2.5 metre fridges that have to stay running 24 hours a day and on top of this there a bakery with four ovens, six cold rooms, a freezer room, a butcher, and a deli.
In terms of energy saving measures Cecil says they have implemented all they can and recently upgraded the store with new more energy efficient glass door fridges, but the benefits of these are minimal when the rates are so high and continue to grow.
“The big problem is the unit pricing and there has to be some sort of cap.
“At least then we would have an idea on a monthly basis of what we need to do because it’s fluctuating every week.
“Our voices need to be heard, we run on tight margins and if this continues it will be a massive hit for us,” he said.
One local business owner who has been left cold by electricity increases is Neil Byrne from Mammy Johnston’s ice-cream parlour in Strandhill who says they are doing everything they can to avoid closing for the winter months.
Neil says that over the last eight years he has worked hard to ensure his businesses is as environmentally friendly as possible, switching out fan cooling machines with water based ones, utilising a water-recycling system to eliminate the need for an immersion, as well as huge investments into the building itself with insulation and a new energy efficient lighting system.
“I am now paying an extra €100-€120 per day in electricity and wondering where I am going to find an extra almost €900 per week.
“Then we are looking at another 30% increase on top of that which could be an extra €40 per day,” he said.
Even while doing everything in his power to keep costs low, such as pasteurising during the night and bringing staff in earlier to make use of lower night-time energy rates, he still sees costs continually rising.
“Closing the place is really something I do not want to do, but in November, December, January, February it may end up being more profitable to close the doors.
“We really don’t want to do that because it’s not fair on the hardworking staff we have in place,” Neil said.
Neil says that small and medium family-run businesses are the backbone of the Irish economy and that they have been ‘left to the wolves’ once again.
“The pandemic was a holiday compared to what businesses are being faced with now.
“It’s small family businesses that employ local people, here in Strandhill there’s the best of 500 people working in tourism-related industries at the height of the season and all that money is going back into the local community,” he said.
Neil highlighted the ‘astronomical’ profits being made by electricity companies and says that from discussions with other business owners he feels smaller outlets will be ‘dropping like flies’ by next February.
“During my quiet months I break even or sometimes lose money and my accountant tells me I’d want to be careful, but I say I don’t want to close because we are providing a service to the community and if you close you’ll lose key members of staff, for this reason we suffer the pain of those months,” he said.
It is not only rising energy costs that Neil has to deal with, he says that prices have gone up across the board and he is also facing difficulties when it comes to sourcing products and increasing staff wages.
“A palette of skim milk that would have been €2,200-€2,500 has now gone up to €5,300 for the same product.
“We are trying to buy forward for the next season on items that have a long shelf life because it’s predicted prices will skyrocket further,” he said.
“The height of summer we have 42 people working for us so when we have to provide an 80c pay increase every euro adds up to €2,000 per person.
“If it’s ten people that’s an extra €20,000 that needs to be found, multiply that by 40 and that’s an awful lot of money.
“You are getting hammered every way you turn and then the multinationals and corporations don’t pay any tax, it’s kick the Irish man down and keep him down, it’s frustrating.”
Neil says he is looking at every conceivable measure to scale the business back and keep things running during the winter season, however it’s essential that the fridges stay running 24 hours a day.
“We’ve got display cabinets down to one, coffee machine is down to one. Instead of five crêpe plates we’ve got two, cut half the seating and just heat half the building, where else can I cut?” he asked.
“The power prices are off the charts and its legalised robbery; the money these companies are making I don’t know how anyone could justify it.”
ESB Group announced profits of €3.7m in the first six months of this year.
“That’s less money circulating in the Irish economy, every business and households’ bills are sucked out and given to gas and oil companies and it’s leaving the country.
“It’s the small businesses that generate money and put it back into the local economy,” Neil said.
“Constantly pulling this money out of the country is not going to lead to a recession, it’ll be a depression.
“The small rural businesses who are employing local kids and helping them get through college and have some income are going to pull their doors shut and they will never open again.”