Price increase will further squeeze publicans already at breaking point
Classic bar with bar counter and beer taps
The Vintners’ Federation of Ireland (VFI) has strongly criticised Diageo’s decision to increase the price of its draught products by a further seven cent per pint (ex VAT), effective from 2nd February, warning that the move will pile yet more pressure on pubs already struggling to survive.
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.”
The VFI is once again calling on both suppliers and Government to recognise the scale of the challenge facing the sector. In particular, the Federation is urging 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.
Mr Crotty concludes: “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.”
