Nearly 50 pubs have closed in Laois over the past two decades, the 5th highest rate in the country a report has revealed.
A report from the Drinks Industry Group Ireland claims an aggressive tax policy is a major factor in the 2,053 pub closures nationally since 2005.
The report says Laois have witnessed a 30.6% decline in public houses, one of the highest rates in the country behind only Limerick, Roscommon, Cork and Tipperary as rural counties seem to be hit the hardest.
More urban counties such as Dublin and Meath, Kildare have experienced much less alarming numbers, 2.8%, 6.7% and 12% respectively.
Economist and Associate Professor Emeritus at DCU, Anthony Foley included an economic analysis of the crisis.
He argued that despite the challenges faced by such as the Covid-19 pandemic and the 2008 Financial Crisis, the economy has grown steadily since 2005.
Foley believes that small and medium sized businesses should be thriving off such a healthy economy but are being hindered by such a regressive excise tax policy.
Ireland has the second highest excise tax environment across the UK and Europe as a 70cl bottle of Irish whiskey sold at an off-licence is levied with an additional excise duty of almost €12.
Coupled with rising costs of insurance and electricity Foley believes that the businesses which are often family run and run on tight margins are being squeezed out of the sector.
However closures seem to have plateaued, this year Laois have only experienced one closure thus far.
Commenting on the report, Foley said: “This analysis verifies the consistent trend we have been seeing with pub numbers in every part of the country.
“There is clearly a variation on closures between counties which broadly sees rural areas adversely impacted.
“The continuing decline is taking place against a backdrop of societal change and cost of business strains.
“Consumption of alcohol has notably decreased, how we socialise is changing, the types of drinks we consume are changing, particularly the rise of low-alcohol and alcohol-free products.
“We are also seeing that with many pubs, which are often small, family-run businesses, sustaining business is becoming harder and harder.
“Fostering commercial sustainability is crucial to safeguarding rural Irish pubs. Ireland’s drinks and hospitality businesses are operating in an environment where the costs of doing business are ever rising.
“Energy, insurance, and other cost line items continue to rise, many by double digits. The sector is also faced with one of the most regressive excise tax environments for small and medium enterprises in Europe.”
DIGI Chair and Communications and Corporate Affairs Director at Irish Distillers, Kathryn D’Arcy, echoed the sentiments of her colleague.
She said: “The decline of over 2,000 pubs since 2005 reflects the real change and challenges this sector is dealing with. Pubs, restaurants, and hotels employ over 207,000 people which is 8.3% of all employees in the country.
These people and the businesses they work for are part of the economic and social fabric of their communities. Running such businesses in a climate where the cost of doing business is squeezing more and more is difficult.
DIGI’s research shows that when the government responds, particularly on heavy cost items like taxation, the sector responds.
Punitive taxes like excise duty which are in some instances 12 times higher here than in other countries, are one such cost item.
“Ireland’s excise on spirits and beer is the third highest in Europe, while our excise on wine is the second highest in Europe.
“We have some of the highest excise duties in the world and the second highest in Europe overall.
“These businesses are integral to Ireland’s tourism offering. We need to take that consideration into account too.
“We are calling on the Government to deliver a reduction in Ireland’s extremely high excise duties which would make an immediate, positive difference to the hundreds of small businesses in our sector struggling to stay open.
“We have costed, considered plans on how to do this and welcome engaging with the government and others on our proposals.”
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