|Posted: June 2nd 2006
PUBLICANS are drowning their sorrows after the sobering news that bar sales have suffered their biggest monthly fall in six years.
According to the Central Statistics Office, takings on booze fell by almost 5% in March, ending a mini-resurgence since the middle of last year, which followed 40 months of decline.
Pub sales were down 1.4% on the same month last year, and it would have been even worse had it not been for Good Friday, a day that publicans must close, falling in April.
Tipplers complain that high prices are keeping them out of the pub — the pint of Guinness recently breached the symbolic €5 mark — but a combination of the smoking ban, a garda clampdown on drink driving and competition from supermarkets is proving bad for business. Up to 600 rural pubs, 10% of the total, have closed their doors in the past two years.
In Dublin, several landmark hostelries have been bought by property developers and converted to apartments. Several well-known landlords have left the trade, including Hugh O’Regan, who sold his Thomas Read group last year after it made a €1.2m loss in 2004.
Rossa White, an economist with Davy, the Dublin stockbroker, said the bar-sales figures were “extremely poor” and were caused by the strength of the off-licence sector and a drink-driving clampdown.
“Even when the pub figures appeared to be recovering slightly recently, they were still way behind the growth in other retail sectors such as consumer goods. Bar sales are definitely not keeping pace with the rest of the economy,” said White.
Oliver Hughes, who owns the Porterhouse chain and celebrity hang-out Lillie’s Bordello, said publicans are bound to be tempted to sell up to developers. “The property phenomenon is huge now, and I think it’s bad for the industry,” he said. “There used to be pub openings in the city every couple of weeks, but there hasn’t been one now in ages. The super-pub era is dead and buried.”
Kevin Towey, who owns a chain of pubs including the Foxhunter and the Arc Bar in Liffey Valley, said: “Cut-throat pricing in the supermarkets has had an impact. The Groceries Order should have still applied to drink. Supermarkets will use alcohol as a loss leader. The pub trade has lost its invincibility. But pubs that reinvent themselves will succeed.”
Louis Fitzgerald, who owns a chain of 24 pubs including the Stag’s Head, which he bought last year for €5.8m, said: “I’m not prepared to get any bigger in the pub trade, but that doesn’t mean that I think it’s finished. There is still plenty of profit, it’s just a question of squeezing it out,” he said.
Fitzgerald said the trend of top suburban pubs being sold for redevelopment, such as Quinlan’s Terenure House, which was bought for €6.5m by the developer Noel Smyth for a 40-apartment scheme, is more an indication of the strength of the property sector.
Donal O’Keeffe, chief executive of the Licensed Vintners Association, which represents Dublin publicans, said rural Ireland is “overpubbed”.
However, Paul Stevenson, president of the rural-based Vintners Federation of Ireland, blamed a growing tendency to drink at home.
John Ryan, an associate director with estate agent CBRE Gunne, said that of the €150m that changed hands for Dublin pubs last year, about €50m was spent on premises that would be knocked down and redeveloped. “Any business with a property bank will have to review its options given the current climate,” he said.
Fitzgerald is considering drumming up business by offering tipsy revellers a lift home in a pub taxi. He is planning to obtain taxi licences for his company in order to ferry customers home at closing time from his suburban properties, and promises to charge a nominal fare.
“Over 40 years ago plenty of pubs had hackneys. The person driving the car would have been the one pulling the pints earlier in the evening,” he said.
Rural publicans are planning other initiatives. Stevenson said: “We have a designated-driver scheme which we will shortly be rolling out.”
The scheme involves giving free soft drinks all night to those who volunteer to drive intoxicated companions home.
The Sunday Times Ireland