This week, Diageo announced it will be increasing the price of its Guinness products from 2nd February. The Vintners Federation of Ireland has criticised the move, but the publicans I spoke to say the VFI is outdated and ineffective.
The increases on products – which will include, among others, Guinness, Guinness 00, and Hop House 13 – could be the last straw on the backs of struggling publicans. The increase of 7c on the pint will mean an added 20c if not more to the consumer once VAT is added; the increase of 10c for the non-alcoholic versions could put the price of the non-alcoholic versions much higher.
This move, according to the company is to offset the pressures placed on the industry post pandemic, and to balance the shortfall thanks to at-home socialising. In a statement the company said they do not set the price of their products and it is down to the individual publican to set the price on the companies’ products.
The CEO of the VFI said: this will put even more pressure on pubs that are already operating on extremely tight margins. West Cork Cllr and leader of Independent Ireland Michael Collins says: ‘this is one of the largest drinks companies in the world squeezing small, family run pubs and this latest increase could be the final straw. Every time the price of a pint goes up, more people make the decision to stay at home rather than meet friends and neighbours in their local pub. That doesn’t mean less alcohol is being consumed, in many cases it means more, but in isolation rather than a social setting’.
He’s not wrong. The list of challenges the small publican faces has increased, especially in the last year or so, and more cost increases are expected in the future. Over 100 pubs close in Ireland every year, the majority are rural.
I spoke to the publican of a small, cherished pub in the town of Killarney to get his take on the situation and the pressures he’s under.
Jimmy Brien’s Bar has been in operation since the 1950’s and is currently rented by local man Alan Breen for the last 15 years.
Alan says he has no issue with his staff – who number six – getting a wage increase as the cost-of-living bites. He says he understands the rent increase as his landlord has cost increases to deal with too. But, last year saw his rates increase, and his energy bill for this tiny bar is now at €1600 every two months. This increase from Diageo has him worried for the future. Not just for himself but for his loyal and beloved regulars.
Irish bars are treasured all over the world, he says, for many it’s the first port of call for the Irish traveller and holiday maker as you’ll get a warm welcome and a sense of home. Irish bars make big money abroad, but here in Ireland we’re losing these cherished spots: they’re closing and nobody in charge seems to care. It’s very short sighted.
Jimmy Brien’s, like many a small pub, is run on the ethos of community. Every year the regulars go on a holiday together. For some they would never have left the country before and have discovered a new lease of life. They are there for one another’s good days and bad – and Alan can be regularly seen dropping regulars home after the bar is shut.
It is more than a pub, Alan says, it’s like a second home for many. “We’re friends first and foremost and it breaks my heart to have to put up the price of a Guinness but I have no choice, the business just can’t absorb the increase. It’s embarrassing to ask my loyal customers to shell out more when they’re finding things difficult enough as it is. They will understand, but it isn’t fair on anyone.”
Killarney has a great tourist trade for nine months of the year and many businesses do well, but for small pubs like this, where there is no room for expansion or extension the publican has to manage on its takings – a task that is getting more difficult.
So how can the government help?
“We’re hard workers,” Alan says, “and I understand you can’t help everyone, but give us something to work with. Give us a fighting chance. Reducing excise duty on products would help a bit. “
This writer’s opinion: The VAT rate on food businesses is set to be reduced from 13.5% to 9% in July of this year, but there won’t be a reduction for publicans. This is so short sighted.
The price on non-alcoholic beers is set to increase; this is counterproductive for a government concerned about national health and drink driving statistics. The small rural pub is more than a watering hole; it is the hub of many a community and without them a part of rural Ireland dies. The trendy city clubs will surely survive but not the hard-pressed small pub and when we lose them, I’ve no doubt there will be a slew of politicians who will come out and lament their loss, and it will be all too little and all too late.