The Vintners’ Federation of Ireland (VFI), which represents more than 3,500 publicans nationwide, has warned that rural pubs are facing an “existential threat to their ongoing commercial sustainability and survival” unless targeted Government assistance is introduced in Budget 2027.
Speaking after addressing the VFI AGM in Mount Wolseley, chief executive Pat Crotty said the challenges facing pubs have reached a critical stage, with closures increasing and operating costs continuing to rise, reports Breaking News.
More than 2,200 pubs have shut their doors since 2005, with closures accelerating in recent years to an average of 128 annually.
“A pub is more than just a business. It performs a vitally important public function as a hub of social and cultural life, connection and community identity. When a rural pub closes, a community loses more than a business – it loses a social anchor”, reports Breaking News.
The VFI said pubs play a major role in supporting the economic and social sustainability of local communities through employment, tourism and social connection.
However, the organisation warned that many pubs are now approaching breaking point because of major cost increases and a lack of targeted Government relief, reports Breaking News.
Electricity costs have risen by 70 per cent over the last five years, while wages have increased by 40 per cent and water charges have also climbed significantly during the same period.
“There is simply no capacity left to absorb further cost increases. Ireland’s pubs, particularly smaller rural pubs that do not serve food, continue to face significant cost-of-business challenges which pose an existential threat to their survival,” Crotty said, reports Breaking News.
“Closures are intensifying and this points to an increasing rate of market failure in the sector.”
While welcoming the reduction of the VAT rate for food services to 9 per cent, the VFI said the measure does not benefit the majority of rural pubs because 64 per cent do not serve hot food, reports Breaking News.
The organisation is calling on the Government to introduce a new On-Trade Sustainability Scheme based on a tax credit linked to the supply cost of draught products as a targeted support measure for the sector.
Under the proposal, the scheme would be capped at €20,000 per premises and is intended primarily to assist smaller pubs, reports Breaking News.
“We have seen the Government move to support industries such as Film and TV, Gaming, and Reality TV through targeted tax credits. Under current arrangements, the TV and film industry can avail of tax relief when filming in an Irish pub, while publicans themselves receive no equivalent support”, Crotty said.
According to a newly published survey of VFI members, business sentiment has deteriorated over the past year, with 41 per cent of publicans saying trading conditions are now worse than they were 12 months ago, reports Breaking News.
Irish pubs are recognised around the world as a defining part of our cultural identity. We must act now to protect them, and the people behind them.
Confidence regarding the future outlook is also low, with almost 42 per cent expressing little confidence while a further 30 per cent described themselves as neutral, reports Breaking News.
Rising operating costs are also severely affecting viability, with 65 per cent of respondents saying increasing costs are having an unsustainable impact on their businesses.
Crotty added: “Government policy should recognise that pubs are essential social and cultural hubs, particularly in rural communities.
“Irish pubs are recognised around the world as a defining part of our cultural identity. We must act now to protect them, and the people behind them”, reports Breaking News.
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