The Vintners’ Federation of Ireland (VFI) notes that ‘urgent challenges’ facing the pub trade – including unsustainable labour costs and the escalating overall cost of doing business – are forcing many publicans to consider retirement in the next two years.
The federation is calling on the government to introduce key supports to ensure the sustainability of the hospitality sector.
‘Simply Unsustainable’
“If we move to a living wage within 18 months, bank holiday pay will be almost €35 per hour for our most junior staff,” said Pat Crotty, CEO of the VFI, in advance of the VFI’s national AGM in Donegal.
“Such costs are simply unsustainable for our members and could severely impact the ability of pubs across Ireland to operate viably.”
Labour Costs
A recent VFI benchmarking survey found that 36% of pub turnover is currently consumed by labour costs alone, and that figure will increase to over 40% with the introduction of the Living Wage.
The same survey found that 37% of publicans are considering retirement within the next two years, and 84% report that no family member wishes to inherit the pub.
‘Urgency’
“While it must be acknowledged that some pubs are doing a thriving business, the findings of our survey underscore the urgency of the situation for many others,” said John Clendennen, VFI president.
“With such a significant portion of publicans looking to exit the industry, combined with a lack of succession plans, we risk losing many of our cherished local pubs unless decisive action is taken.”
Transition Scheme
The VFI is urging the government to consider specific measures to support the pub sector, including a re-evaluation of the impending shift to the Living Wage, in consideration of its impact on small businesses, and the implementation of targeted relief measures.
The federation also wants the government to reduce the standard VAT rate from 23% to 21%, along with the development of a transition scheme for new entrants and next-generation publicans, to encourage streamlined succession and ensure that pubs remain viable in towns and villages.
‘Challenging Times’
“These pubs are more than just businesses – they are the heart of many of our communities, offering a place for social interaction, celebration and tradition,” said VFI CEO Crotty.
“Supporting them through these challenging times is essential, not just for the pub owners, but for the cultural and social fabric of the country.”
The VFI AGM takes place in Jackson’s Hotel, Ballybofey, Donegal, on Tuesday 14 May at 10am.
