Pint price hikes could tipple rural pubs over the edge

As consumers face an increase in the price of a pint by up to 20c, Meath publicans have warned that repeated supplier price increases are contributing to rural pub closures.

Diageo said it was increasing the cost of a pint of Guinness by seven cent. However, when VAT is added to that and the publicans’ margins are factored in, the price for consumers is likely to climb by 20 cent.

Meath publicans say it is getting harder and harder to do business in this country, while the Vintners Federation of Ireland (VFI) said the price increase would “pile yet more pressure on pubs already struggling to survive”.

Navan publican, Damian Clarke said the price increase was extremely disappointing.

“There were two increases last year. It is killing off trade during the week. The lads that came out for a social pint on a weeknight, just cannot afford it anymore.

“Diageo say their costs have gone up, but they are a multi million euro company, the cost of business for small pubs is getting higher and higher, that is why many are not in business anymore,” he said.

Trim publican, Robert Lynch, said that ever increasing costs were making it more and more difficult for pubs to stay open.

“The cost of heating, lighting, Sky TV are rising and the minimum wage has gone up. This is the fifth price increase in three years, which seems like an awful lot to pass onto the customer.

“Costs are rising which is probably why we are losing so many pubs,” he said.

Some pubs will be left with no choice but to call time on their businesses for good, according to the VFI.

VFI points out that drink costs are the single biggest cost facing all publicans and this latest increase comes at a time when margins are already being eroded by rising labour costs, high energy prices and ongoing inflation across all areas of the business. For many pubs, there is simply no capacity left to absorb further supplier increases.

Pat Crotty, CEO of the VFI, states: “Publicans are being hit from all sides, but drink costs are the biggest burden they face. This latest price increase from Diageo will put even more pressure on pubs that are already operating on extremely tight margins. Many will be left with no option but to pass this on to customers, which helps nobody.”

He continues: “Our members understand that suppliers also face rising costs, but there comes a point where pubs simply cannot keep carrying these increases alone. Pubs are at the heart of local communities and suppliers depend on them for their route to market. We expect suppliers, including Diageo, to recognise that reality and to support VFI members rather than repeatedly adding to their cost base.”

The VFI warned that repeated supplier price increases are contributing to rural pub closures, where pubs are already under severe pressure from declining footfall and rising operating costs.

“This isn’t just about the price of a pint,” says the VFI CEO, “It’s about the long-term viability of pubs across the country. Community pubs are being pushed to the brink, and continued increases in drink prices only accelerate that trend.”

He called on both suppliers and Government to recognise the scale of the challenge facing the sector and urged Government to introduce targeted supports to help pubs remain viable, including an excise rebate scheme for draught beer and cider sold in pubs and measures to ease rising labour costs, including employer PRSI supports

“Publicans cannot continue to absorb these hits year after year. If suppliers value the role pubs play in Irish life, now is the time to show it through meaningful support. Without action, more pubs will close and once they’re gone, they’re gone for good.”

Diageo said the increases would take effect from 2nd February, blaming “industry-wide cost pressures”.