VFI calls for urgent government support amidst rising costs crisis

The Vintners Federation of Ireland (VFI) says that urgent challenges facing the pub trade, including unsustainable labour costs and the escalating overall cost of doing business, is forcing many publicans to consider retirement in the next two years. The Federation is calling on the Government to introduce key supports to ensure the sustainability of this critical hospitality sector.

  • 37% of publicans considering retirement in next two years
  • Minimum wage will hit €35 per hour on bank holidays within 18 months
  • VAT, excise and employer’s PRSI all need to be lowered for small businesses to survive

 

Speaking in advance of the VFI’s national AGM in Donegal, Pat Crotty, CEO of the VFI, expressed deep concern over the projected increases in labour costs due to the planned shift to a living wage by the start of 2026. “If we move to a living wage within 18 months, bank holiday pay will be almost €35 per hour for our most junior staff. Such costs are simply unsustainable for our members and could severely impact the ability of pubs across Ireland to operate viably,” he says.

The call for action comes in light of a recent VFI benchmarking survey which paints a stark picture: 36% of pub turnover is currently consumed by labour costs alone and that figure will increase to over 40% with the introduction of a Living Wage.

Moreover, the survey reveals a worrying trend about the future of the pub trade, with 37% of publicans considering retirement within the next two years and a staggering 84% reporting that no family member wishes to inherit the pub.

VFI President John Clendennen says: “While it must be acknowledged that some pubs are doing a thriving business, the findings of our survey underscore the urgency of the situation for many others. With such a significant portion of publicans looking to exit the industry, combined with a lack of succession plans, we risk losing many of our cherished local pubs unless decisive action is taken.”

The federation says the challenges extend beyond labour costs, with increases being felt across all areas of operation. “Our members are facing rising costs across the board — from food and drink to utilities and insurance. These factors are placing immense pressure on the viability of pubs,” says John Clendennen.

The VFI is urging the Government to consider specific measures to support the pub sector, including:

  • Re-evaluation of the impending shift to a living wage in consideration of its impact on small businesses.
  • Implementation of targeted relief measures such as a reduction in employer’s PRSI; a reduction in alcohol Excise Duty, which is currently the second highest in Europe; and a commitment to set the hospitality VAT rate permanently at 9%.
  • Reduce the standard VAT rate from 23% to 21%.
  • Development of a transition scheme for new entrants and next generation publicans to encourage streamlined succession and ensure pubs remain viable in towns and villages.

“These pubs are more than just businesses; they are the heart of many of our communities, offering  place for social interaction, celebration, and tradition,” says Pat Crotty. “Supporting them through these challenging times is essential not just for the pub owners but for the cultural and social fabric of the country.”

The VFI looks forward to engaging with Government representatives to discuss these proposals further and to collaboratively identify solutions that will support the continued viability of the Irish pub trade.

Editor’s note:

The VFI AGM takes place in Jackson’s Hotel, Ballybofey, Donegal on Tuesday 14th May at 10am.

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