The Irish government is to outlaw below cost alcohol sales amid renewed calls to save the traditional Irish pub from extinction.
Prime Minister Enda Kenny’s Cabinet is proposing a minimum price on beer and wine at off-licences and supermarkets to curb the availability of cheap booze.
The move comes as industry experts warn that the Irish pub is a dying breed – despite Barack Obama’s endorsement when he drank a pint of Guinness in his ancestral hometown of Moneygall last year.
Over a thousand pubs have already closed in Ireland since the collapse of the Celtic Tiger economy and publicans fear many more will follow.
The Vintner’s Federation has even warned that 5,000 jobs could be lost in 2012 alone as publicans suffer from the recession, a lower drink driving limit and a ban on cigarette smoking in public places.
With pub sales down by a third since 2006 and the number of licensed premises down to just 7,509 in a country famous for its pubs, many fear that the worst is yet to come.
“There are many reasons for the decline of the pub, but they centre around changing lifestyles, regulatory changes and the weak economy,” Padraig Cribben, chief executive of the Vintners Federation of Ireland, told the Financial Times. “People are cash poor due to the recession, and retail sales have become a lot cheaper.”
Despite industry protests last month, the Irish government has increased VAT on sales to 23 per cent as part of its austerity Budget.
“The VAT increase is a significant hit for us to take. I fear this could be the tipping point for some publicans,” added Cribben as rural pubs feel the brunt of the recession.
Wicklow publican Liam Fitzpatrick, host at the family pub in Rathnew, told the FT that sales are down 30 per cent since the height of the boom.
“There has been a cultural shift in Ireland over the past decade with people drinking at home rather than in the pub,” said Fitzpatrick who puts the decrease in business down to the smoking ban, tough drink driving laws, cheaper off-licence sales and a big improvement in housing standards.
Higher unemployment and some emigration, is also hurting sales according to Fitzpatrick.
He said: “There is a danger more pubs will go out of business. I’d say probably one in three of the existing pubs will have to close down in coming years.
“At the moment the pub is still up there as an Irish institution – one of the big attractions for tourists and important to communities. There is a danger we could lose that. The government needs to act now.”