Offaly bucks nationwide trend of pubs closing down

Offaly is one of only four counties in Ireland where the number of pubs is increasing instead of falling, according to a newly released report on pub closures.

The report from the Drinks Industry Group of Ireland (DIGI) looks at long-term trends in pub closures since 2005, with additional focus on the impact of the Covid-19 pandemic on the industry.

While over the full 2005-2023 period, Offaly is among the top ten counties in terms of percentage pub closures, with 28 per cent putting it in ninth place, in the past two years the county has very slowly been adding back to those numbers.

The pandemic had a negative impact on the industry in Offaly, as everywhere else in the country. The county saw its pub numbers fall from 128 in 2019 to 119 in 2020 and 115 in 2021, the worst years of the pandemic. That was a pub closure rate of 10.2%.

However, while most counties have continued to see closures since the pandemic, Offaly has started to see its numbers increase, with 117 registered in 2022 and 118 in 2023.

The DIGI report notes that only Dublin, Leitrim, Louth and Offaly saw increases in 2023, all of equally small numbers. Another three counties, Carlow, Kilkenny and Waterford, saw no change, while the remaining 19 counties had further losses.

Overall, the situation for the pub industry nationwide remains worrying. The report, titled Support Growth: A Sustainable Future for Ireland's Drinks and Hospitality Sector, said that since 2005, Ireland has seen a 23.8% decline in pubs nationwide, with 98% of those closures taking place outside Dublin.

Closures are in excess of 100 pubs annually, with numbers worsening in recent years. Follong the peak of 247 closures in 2020, there were were 102 in 2021, 108 in 2022 and 117 in 2023.

Economic analysis in the report, by Anthony Foley of Dublin City University Business School, showed that social factors that may impact the industry include decreases in the rates and volume of alcohol consumption.

Another factor affecting the industry is Ireland's high level of alcohol taxation compared to other EU countries. Despite the challenges of the 2008 financial crisis and Covid, the decline has occurred while the Irish economy was growing at an unprecedented rate.

Foley said that while this growth should have supported the industry, “Ireland's regressive tax policy on alcohol has hindered the potential of the industry to grow and made business increasingly difficult for publicans,”

He said that Ireland has the third highest excise levied on beer and spirits and the second highest on wine in the European Union. That means that “for a French visitor to Ireland, a standard glass of wine that would attract an excise duty in France of just 1 cent is levied with an additional 80 cents excise duty here, while 15 EU countries do not excise wine at all.”

Chair of DIGI, and Corporate Affairs Director at Irish Distillers, Kathryn D'Arcy said that the high rate of closures outside Dublin is concerning for rural communities and noted that the majority of pub closures over the years have been small, family-run enterprises.

“Such business closures harm local communities and the social lives of rural, often aging communities already facing social isolation. The local pub is often the only place where people can come together for a drink and a chat or host community events.”

Furthermore, in the last six months of 2023, 283 food-led businesses such as restaurants, cafes and gastropubs closed, with a further 212 shuttered so far in 2024. D'Arcy said “Ireland's drinks and hospitality businesses are currently operating in an environment where they are faced with significant and recurring cost challenges.”

She said a survey carried out among 600 hospitality leaders in August 2024 showed that one in four saw their business costs increase between 20-30% in the last two years, and another 15% found their costs increase by over 40% during that time.

However, the survey found that, if the government provided meaningful support, such as cuts in excise duty, these businesses would respond positively, with 18% hiring more staff, 23% refurbishing their business and 22% using the savings to meet other costs. Another 13% would invest in additional offerings, such as food and accommodation, which D'arcy said highlighted the “untapped potential of the industry”.

D'Arcy said another survey among 1,000 consumers showed the importance of the sector to Irish society, with “almost 70% of Irish consumers visit our traditional pubs and restaurants to catch up with friends or family, over half (58%) to celebrate family occasions, while one in four people go to the pub to watch sport.”

Therefore, D'Arcy said the DIGI were calling on the government in Budget 2025 “to move to a sustainable excise tax policy by commencing the process of aligning Ireland's excise tax rates with other EU countries.

“This can be achieved by implementing a 15% excise tax reduction over the next two years, with a 7.5% decrease in 2025 followed by another 7.5% reduction in 2026. Such a measure would have an immediate impact by reducing the cost base for thousands of Irish businesses across the country.”