'Inevitable' that more pubs will be forced to close their doors following Budget 2025

A Cork city publican has described Budget 2025 as “a very disappointing day” for small- and medium-sized businesses.

President-elect of the Vintners Federation of Ireland (VFI) and owner of the Castle Inn in the city centre, Michael O’Donovan, said that it is now inevitable that more pubs will be forced to close their doors.

A series of measures aimed at providing relief for businesses struggling with rising costs, including an energy subsidy scheme worth €170m to provide support to approximately 39,000 firms across the country, was announced yesterday.

The budget announcement by Finance Minister Jack Chambers and Public Expenditure Minister Paschal Donohoe failed, however, to listen to calls from representatives within the hospitality industry to reduce the Vat rate from 13% to 9%. It was also announced that excise duty on alcohol will remain unchanged.

Ahead of the budget announcement, Mr O’Donovan had called for a reduction of the excise duty on alcohol, a reduction in Vat for food only, and wage increases to be looked at by Government.

Expressing his disappointment following the Budget 2025 announcement, which also included an increase in the national minimum wage by 80c per hour to €13.50 per hour, Mr O’Donovan said: 

“While nobody would argue against looking after staff, at a time when costs are soaring, this will mean that over 20 months we’ll have seen a huge increase of €2 on minimum wage from where it was over two budgets ago — that’s a big cost on any business.”

Speaking about the €170m energy subsidy scheme that is set to provide financial support to approximately 39,000 businesses, Mr O’Donovan said: “If you break it down, it’s just €72.69 per week per business, and they announced an 80c minimum wage increase and we know from experience that all staff will want that increase.

“Your €72.69 will get swallowed up quite quickly and a lot more on top of it, so it’s only a sticking plaster to cover a small portion, it’s not going to keep businesses viable.”

Mr O’Donovan said that publicans across the country feel let down by the Government and added that they are not listening to small businesses who, he said, are the backbone of the country.

“It’s not a good day for any small or medium-sized business today that have had these costs put upon us, and inevitably by putting pressure on the bottom line we will see pubs close over the next number of months because they just won’t survive,” he said.