The figures make for sober reading.
More than a fifth of pubs in Ireland are struggling to cover costs of up to €2,000 a week while generating no revenue during the lockdown, according to new research from the Drinks Industry Group of Ireland (DIGI).
The research, conducted among 1,085 publicans in Ireland last week, reveals that over one fifth (22%) have incurred continuing costs of between €1,000 and €2,000 per week for items such as salaries, salary top-ups, rent and maintenance.
Meanwhile, 60% of publicans reveal that government subsidies cover only 20% or less of their costs per month.
Now the DIGI is calling for a cut in excise tax in Budget 2021, set tp be published on Tuesday.
“With further restrictions an inevitability, coupled with a lack of a coherent strategy or any certainty, the sector requires a direct response and targeted support measures,” said Liam Reid, DIGI Chair.
This is one of the hardest things I have every done Locking up the bar again and home to my wife and 3 kids Now we are in the hands of the General Public, NPHET & our Government Hopefully we will get back to work soon @VFIpubs @CorkVFI @pure_cork pic.twitter.com/8Z0p6kKE05
— Michael O’Donovan (@michaelodono99) October 6, 2020
“Our survey of publicans shows plainly that there have been very serious financial implications for those publicans who have fought to protect their business throughout the pandemic. This has led to massive personal strain: more than two-thirds of publicans say that their mental health has suffered as a result of the Covid-19 restrictions.
“Now is the time for the government to act. They simply cannot delay any longer. Ireland’s drinks and hospitality industry has suffered through the longest lockdown in the EU. In order to recover, we need long-term, practical and targeted supports that will truly make a difference.
Ahead of the Budget, the Drinks Industry Group of Ireland is calling on the government to “give due consideration to the current constraints that exist within the drinks and hospitality sector” and to consider how measures such as a 15% reduction in excise tax, which is the second-highest in the EU, could help to create a more pro-business environment for the industry.
“While the physical image of businesses with their doors closed for months on end can help to generate sympathy and compassion, it’s not until you see statistics like these that you fully understand what those in the sector have endured for the past seven months,” added Mr Reid.
Half of pub owners have let staff go permanently
According to the research, one in four publicans have accumulated over €20,000 in debt as a result of their business being closed due to Covid restrictions, while 15% of pubs have accumulated over €50,000.
For those publicans who have been allowed to reopen under government guidelines in recent months, one in four (40%) report a decline of over 50% in trade compared to the same period last year. 40% say that reduced demand and Covid restrictions have resulted in a reduction of over 60% in profits on the same period in 2019.
A further 15% of pubs have reopened only part-time due to the reduced level of business as a result of Covid restrictions and half of pub owners have already had to let staff go permanently. Over half (52%) fear that they will have to let more staff go in the future.
“This situation will continue well into 2021,” said DCU Economist, Anthony Foley.
“The new “new normal” is stop-start. Even a phrase such as “the restart grant” is no longer appropriate as there may be several restarts over the next year. Changes in the restart grant are an attempt to reflect this but a more definite systematic approach is needed.
“Even when open for business, the continuing public health measures mean that the hospitality sector is operating with a fundamentally worsened business model.”