Local pubs need national help says new Cork-based VFI chief

A CORK publican has called on the Government to introduce key supports to ensure Irish pubs have a “fighting opportunity to survive into the future” after a survey found that a significant percentage of publicans could leave the sector in the coming years.

According to the Vintners Federation of Ireland (VFI) survey, 37% of the publicans surveyed are considering retirement within the next two years and 84% reported that no family member wishes to inherit the pub.

The survey found that 36% of pub turnover is currently consumed by labour costs and that figure will increase to over 40% with the introduction of a living wage.

Speaking to The Echo, owner of The Castle Inn on South Main St, Michael O’Donovan, said that while some pubs are faring well, others are struggling with the current costs of doing business.

“Some are doing very, very well at the moment, but as we saw from our recent survey, a lot of our members are struggling at present,” Mr O’Donovan, who was recently announced as president-elect for the VFI, said.

“We’re seeing high costs on labour input into our business at the moment driven by Government changes to minimum wage and it’s having a real effect on business at the moment with staffing for most publicans, the cost of staffing, and as we see with the proposed increases coming next January and the January after to take us to the living wage, it’s putting extreme pressure on businesses to survive.

“What we saw from our survey is a lot of publicans are thinking about retiring or stepping away from the business over the next 18 months so it’s a real concern at the moment.”

A national living wage is set to replace the national minimum wage from 2026. The living wage will be set at 60% of the median wage in any given year.

Mr O’Donovan, who will start as president-elect at the VFI’s national AGM in Donegal today, said he believes 2026 is not the right time to implement the move to a living wage.

“Businesses are under severe pressure at the moment.

“Maybe when things are in a better situation in a few years down the line, it’s something we can really revisit but if this was to happen as planned in the next two years, we would see a lot of businesses unfortunately not survive that because the cost base would just be too big,” he said.

This was echoed by CEO of the VFI, Pat Crotty.

“If we move to a living wage within 18 months, bank holiday pay will be almost €35 per hour for our most junior staff,” he claimed.

“Such costs are simply unsustainable for our members and could severely impact the ability of pubs across Ireland to operate viably.”

The federation says the challenges extend beyond labour costs, with increases being felt across all areas of operation.

As well as seeking a re-evaluation of the impending shift to a living wage, the VFI is also seeking the implementation of a range of targeted relief measures such as a reduction in employer’s PRSI; a reduction in alcohol excise duty; a restoration of the hospitality VAT to 9% and a reduction in the standard VAT rate from 23% to 21%.

Mr O’Donovan said such measures would give businesses a “fighting opportunity to survive into the future”.

VFI president, John Clendennen, also said “decisive action” must be taken.

“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,” he said.