NEWS/PRESS (full article)

Major new survey shows scale of half-decade of decline in Irish pubs, restaurants, nightclubs and hotels

The Drinks Industry Group of Ireland (DIGI) has today published its “Survey of Licensed Premises 2009”, the largest ever research exercise undertaken on the Irish on-licensed sector.

The report, compiled by DCU economist Mr Anthony Foley, is DIGI’s sixth Survey of Licensed Premises and covers the period 2004-2009. The main conclusions of the report are that during that period employment has decreased, sales revenues have fallen, and labour costs have increased in pubs, restaurants, hotels, and nightclubs.

Speaking at the launch of the report in Kehoe’s of South Anne Street in Dublin city centre this morning, DIGI Chairman, Kieran Tobin, said that the survey records a period of decline in the on-trade in Ireland that had begun in the early years of the decade, and which has accelerated sharply over the last 18 months.

Mr Tobin said that the economic downturn and lifestyle changes were combining with high alcohol taxes and a major increase in cross-border trade to put the wider drinks industry under immense pressure, but particularly pubs, bars, restaurants, and nightclubs where closures and redundancies are now commonplace.

Accordingly, Mr Tobin called on the Government to reduce by 20% Ireland’s excessive levels of excise duty which are amongst the highest in Europe to sustain an industry that continues to provide thousands of jobs and billions of Euro in revenue to the State.

Mr Tobin commented, “The Survey of Licensed Premises 2009 details trends in the on-trade from the height of the Boom to the present day, when the entire drinks industry is in virtual freefall. In 2004 we began to see a slowdown in sales and revenue in pubs, hotels, nightclubs, and restaurants, but the scale of the decline has accelerated sharply in the last 18 months.”

The report’s author, Anthony Foley added, “This survey which was conducted by Amarach Research via a telephone survey of a representative sample of 748 licensed premises is the largest research exercise undertaken on the Irish on-licensed sector and reflects its economic and social impact.

“The overall picture is one of a sector suffering a period of sharp decline, with a large majority (70%) of all licensed premises surveyed reporting a decrease in net sales over the past five years.

“Moreover, the majority of licensed premises have relatively low annual sales revenues. 49% of all premises have annual sales revenues below €200,000, while at the low end, 27% of pubs located outside Dublin have annual sales revenues of less than €60,000.

“These declining revenues have had an impact on employment with 47% of all premises surveyed reporting a decrease in their staff levels over the five year period. This figure rises to 65% for pubs and bars in Dublin.

“At the same time, the on-trade remains employment intensive, with 75,000 people currently working in pubs, hotels, restaurants, nightclubs, at an average of seven staff per premises. As a consequence, labour costs are significant. The share of wages and salaries in net sales is at or over 25% for 30% of licensed premises compared with 19% of premises in 2003.”

Kieran Tobin concluded, “This major survey requires careful and considered examination by all those in our industry and by Government. The reasons for the declines in sales and revenue in the on-trade are clear: lifestyle changes and a shift to the consumption of alcohol at home have had an impact on licensed premises, but cannot on their own account for the losses which the sector is suffering.

“A reduction in disposable income caused by the economic downturn combined with the availability of cheaper alcohol products for purchase in Northern Ireland, are clearly major contributory factors to the patterns recorded in the survey.

“In advance of Budget 2010, DIGI is calling on the Government to recognise the contribution of an industry that employs over 85,000 people throughout all sectors (manufacturing, distribution, and sales in the on- and off-trades) and provides over €2 billion in excise and VAT and €1.2 billion in export revenues. Accordingly the Drinks Industry is urging the Minister for Finance to reduce excise rates by 20% to restore some balance between our excise levels and those which apply in Northern Ireland.”

ENDS

A full copy of the document is available here