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Pub closures continue as revenue figures show 71 rural pubs closed in 2018 - 1,535 less pubs in rural Ireland than in 2005

New survey shows that more than half of Irish pubs (57%) rely on the UK tourism market heavily, as figures show a decrease in visitors by 4.4% and declining tourism revenues. 

• 51% of Irish people bring international visitors to their local pub, 64% bring their guests to their local restaurant,
• New Drinks Industry Group of Ireland research also shows drinks and hospitality businesses, like pubs, remain a focal point of Irish culture, tourism and society
• However, publicans, restauranteurs and off-licence owners say that high taxes and levies are damaging them
• Ireland’s alcohol excise tax is the second highest in the EU—DIGI wants to reduce it over the next two years
• DIGI chair Rosemary Garth: “Many European governments…like France, Italy and Germany, have nurtured a positive relationship with their drinks and hospitality businesses.”

New research has found that 57% of pubs, and 44% of restaurants rely on the UK as their most important tourism market, this compares to only 18% of pubs stating the USA as their number one tourism market, and 17% of restaurants.

The research, conducted with over 500 members of the Drinks Industry Group of Ireland, in addition to research conducted by Amárach Research among 1,000 Irish consumers, forms part of DIGI’s new report, Building a Sustainable Drinks and Hospitality Sector: The Role of Government Policy, authored by DCU economist Anthony Foley. The report underlines the importance of drinks and hospitality businesses to the Irish economy, especially to tourism.

When international relatives visit family in Ireland, pubs and restaurants prove more popular than tourist attractions, as the research shows that more than half (51%) of Irish people bring international visitors to their local pub, 64% bring their guests to their local restaurant, both compared to just 1% who bring their guests to their local tourist attraction.

CSO figures issued this week highlight that pre-Brexit uncertainty is already having a negative impact on tourism from Great Britain. In May 2019, the total number of trips to Ireland by overseas residents decreased by 0.4% to, however, worryingly, trips by residents of Great Britain decreased by 4.4%.

Tourism Ireland figures also revealed that between January and March in 2018 and the same period this year, tourism revenue fell from €1.08 billion to €1.02 billion when fares are included and from €795 million to €763 million, a decrease of 4 per cent over the same period.

This also comes at a time when recent Eurostat data shows that Ireland is the second most expensive EU country for buying alcohol, at 77% above the EU average, behind only Finland at 82%.

These are worrying trends that need to be monitored and reversed. The report cites the reliance of the drinks and hospitality industry on strong tourism and equally, the importance of this industry in developing Ireland’s tourism product.

Role of drinks and hospitality industry domestically

Domestically, the benefits of the drinks and hospitality sector are equally clear-cut. Nearly a third (32%) of Irish consumersvisit a restaurant at least once a week, and nearly a quarter (23%) a pub. These businesses perform a huge social function: 72% of people who go to a pub say they go to meet friends, while 63% of publicans say their business helps elderly people living in isolation to socialise.

Despite these important social and cultural roles, drinks and hospitality business owners feel pressured. 71% of publicans say that Ireland’s high alcohol excise tax has negatively impacted their business in the last 12 months. Over a third (37%) of off-licences believe they will close in the next 10 years, while 10% of rural publicans say they will let staff go in 2019 due to rising business costs.

High government levies are compounding these issues. Irish businesses and consumers pay the highest excise tax on wine, the second highest on beer, and the third highest on spirits, even though Ireland produces some of the world’s most famous drinks products.

Protect jobs by reducing excise tax

The wider hospitality sector employs 175,000 people, nearly 8% of all Irish workers. The drinks industry alone directly and indirectly employs 90,000.

The drinks and hospitality sector generates €1.4 billion in exports. The number of alcohol manufacturing licences increased from 32 in 2009 to 137 in 2017. In 2013, there were just 4 working distilleries; in 2019, that number is 25, with 17 Irish whiskey distillery visitor centres in all four corners of the country.

The more that business owners are forced to spend on levies like excise tax, the less that is available to invest back into their business to develop tourism offerings, improve existing products and create new ones, or hire staff.

To safeguard the drinks and hospitality sector’s immense progress, and provide the means for further growth and job creation, DIGI, ahead of Budget 2020 is calling on the Government to reduce Ireland’s prohibitive and high excise tax.  

Rosemary Garth, Chair of DIGI and Director of Communications and Corporate Affairs at Irish Distillers, said:

“The drinks and hospitality industry is one of Ireland’s most important sectors in terms of tourism. This industry delivers over €6 billion in tourism spend, but with Brexit uncertainty, and our lack of competitiveness in Europe, this industry is facing into some very challenging times.

Economically, socially and culturally, Ireland is undoubtedly a changed country but some things will remain permanent, important fixtures of Irishness, and that includes enjoying a pint at a pub, a glass of wine at a restaurant, or a cocktail in a hotel bar, with friends, family and colleagues.

“Our research demonstrates this. However, the Government is publicly indifferent to the success of Ireland’s drinks and hospitality sector, and is more than happy to burden it with a punishing excise tax rate and high VAT.

“We want the Irish Government to learn from its EU counterparts. Many European governments, particularly those in countries with a long history of alcohol production, like France, Italy and Germany, have nurtured a positive relationship with their drinks and hospitality businesses. In France, excise tax on a glass of wine is just 1 cent, and the Germans charge only 5 cents on a pint of lager.

“To protect jobs and create new business opportunities, especially in rural Ireland, we are calling on the Government to take steps towards forming a new relationship with the drinks and hospitality sector and reduce excise tax on alcohol by 15% over the next two years.”

Read the full Building a Sustainable Drinks and Hospitality Sector report.