British pub chain owner JD Wetherspoon has purchased the popular Dublin pub, Tonic. JD Wetherspoon expects to complete the $2 million acquisition, their first on the southern side of the Irish border, in the next couple of days.
The company also plans to renovate the Blackrock, Co Dublin pub and give it a new look, which means a further $2 million investment. An opening date has not yet been announced, but JD Wetherspoon hopes to open the pub by April 2014.
JD Wetherspoon also agreed earlier in the year to purchase the 40 Foot, another pub in Dun Laoghaire, just south of Blackrock.
The company owns 800 pubs across the UK, including nine pubs in Northern Ireland, and is known for its low prices and long opening hours. Tim Martin, JD Wetherspoon founder and chairman told Business Etc that JD Wetherspoon hopes to “invest up €50 million ($68m) in the Republic of Ireland over the next five to ten years, opening between ten and 20 pubs.” He also said, “Each pub will create approximately 50 jobs.”
About half of Ireland’s pubs and bars are set to close due to the current recession, rising costs, and Ireland’s tough drunk driving laws. Vision-net administered a stress test to 945 pubs and found that 20 percent were at medium risk of failure and only 31 percent were at low risk. Vision-net’s report also found that the number of pubs in Ireland has plummeted since the height of the Celtic Tiger in 2005.
Wetherspoon had considered buying pubs a decade ago, but the high cost of doing business during the Celtic Tiger postponed its plans.
Donal O’Keefe, chief executive of the Lincensed Vintners Association, which represents Dublin pubs told the Financial Times, “This is an opportune time to invest due to the collapse in capital costs.” He added, “We are far more optimistic about the future for Dublin pubs than at any time in the last five years.”
O’Keefe does not think Wetherspoon’s plans will undermine the traditional Irish pub culture. He said, “It would obviously be a terrible tragedy if it changed Irish pub culture. But even if Wetherspoon were to buy 20 pubs, this would still just be a tiny fraction of the 750 pubs in Dublin. We think the individuality of Dublin pubs will pertain for the long term.”