A recent survey conducted by the Licensed Vintners Association (LVA) has revealed significant concerns among pub owners regarding the potential impact of an increase in the minimum wage. The survey, which included responses from over 350 pubs, approximately half of those in Dublin, indicates that 36% of pubs may reduce their staffing levels if the Government proceeds with the proposed wage increase. Additionally, 21% of pub owners reported that they would likely reduce the number of new hires compared to previous plans.
Price Increases and Economic Pressures
The minimum wage in Ireland currently stands at €12.70 per hour. The low pay commission has recently recommended an increase to at least €13.70 per hour by 2025. Nearly half of the pub owners surveyed expressed concerns that such an increase would force them to raise their prices. The cumulative effect of this and other rising costs is proving challenging for the hospitality sector, which is already grappling with several economic pressures.
According to the survey, 96% of respondents believe that recent and upcoming Government changes to employment conditions—such as increases in the minimum wage, changes to sick pay, employers’ PRSI, and the introduction of pension auto-enrolment—are happening “too much, too fast.”
Financial Strain and Business Viability
The survey also highlighted other financial strains faced by many pubs. Notably, 64% of respondents reported an increase in their insurance premiums at the most recent renewal. This adds to the growing list of financial pressures that pubs must navigate. Furthermore, 15% of pub owners indicated that it is no longer profitable to remain open seven days a week, suggesting that some may be forced to reduce their operating hours to manage costs.
Donall O’Keeffe, CEO of the LVA, emphasised the gravity of the situation, noting that the combined effect of increased VAT, sick pay, employers’ PRSI, and the minimum wage is pushing many hospitality businesses to the brink. “This simply isn’t sustainable, and it should come as no surprise that so many hospitality businesses are closing in this environment,” he stated.
In summary, the survey conducted by the LVA sheds light on the mounting challenges facing Ireland’s pub industry. The potential increase in the minimum wage, coupled with other rising costs, is causing concern among pub owners about the future viability of their businesses. As the Government continues to introduce changes, many within the industry are calling for a more measured approach to ensure the sustainability of the hospitality sector.
