'The timing is really bad': Cork pub owner feels pint price rise will put people off going out

CORK City Chairperson of the Vintners Federation of Ireland (VFI) Michael O’Donovan has said that an increase in the price of a pint is “another blow” to the industry and not what publicans were expecting at this time.

It comes as Diageo is to increase the cost of its draft beers by 6 cents from next month following a 12-cent hike announced in February 2023.

The price increase will come into effect on April 15 and will raise the cost of its various draft offerings, including Guinness, Hop House 13, Carlsberg and Rockshore.

Speaking to The Echo, Mr O’Donovan said the price increase is unexpected following an increase in the minimum wage and additional mandatory sick days increasing from three days to five days.

“This is a bad time to do it, coming on the back of government decisions to increase the minimum wage and sick days, with auto-enrollment for pensions coming later in the year. We would have thought that this year, the breweries would have supported us and not had any price increase. It’s not what we expected at this time,” he said.

Mr O’Donovan said the increase is an additional blow to the industry that is already feeling the effects of the cost of living crisis.

“The timing is really bad. We’re heading into the summer season and for this to come at the start of it pushing prices up further makes us an expensive destination for tourists,” he said.

“If somebody has €20 or €30 to go out on a night, it’s not going as far as it used to go. Instead of going out two nights in a week, they might now just go out one night in the week and that obviously has a huge impact on our turnover on our bottom lines.

“Pubs have been closing, albeit in a slower number, for the last 18 months to two years but this will be another blow to our industry because people might not be able to afford to go out as much as they did so that’s a real concern for our industry.” 

 He said the pub industry has become events-driven and that people tend to save for an event such as a match day, birthday, or other celebration.

“The discretionary income that people have has shrunk greatly over the last two years and that’s what we depend on, people going out and enjoying themselves, and unfortunately they haven’t had as much of that income to spare over the last two years, so it’s had a real impact on our businesses.” 

VFI CEO Pat Crotty said the decision by Diageo “is not just disappointing, it’s a critical hit to an industry on the brink”.

"The government must come forward with support measures for the trade as the Increased Cost of Doing Business grant, while welcome, is not an adequate response,” he said.

“The VFI is calling for further supports to include a reduction in excise, a return to the 9% VAT rate for pubs serving food and a reduction in employer’s PRSI. Publicans can’t be expected to take all these hits without meaningful support.”