Ireland has lost an average of two pubs every week since 2006, according to a new report.

The report from the Drinks Industry Group of Ireland (DIGI) shows that 2,054 Irish pubs have closed their doors for good in the past two decades.

It works out at 114 pubs a year or just over two per week.

It warns that the number of closures has increased in recent years – with the country losing 144 pubs a year over the last five years.

The report includes a county-by-county breakdown of the closures with Limerick losing 35.6% of its pubs over the studied timeframe – more than any other county in Ireland.

Dublin has seen the lowest number of closures, losing just 2.8% of its pubs.

'Serious loss'

Report author and DCU economist Anthony Foley told Breakfast Briefing that the closures represent a “serious loss in terms of not only economic infrastructure for small villages and local rural areas but also in terms of the social impact that they the pubs would have as gathering places and meeting places”.

He said the number of closures hit peaks during the economic crash in 2008, 2009 and 2010 and then again during COVID in 2020.

He said that decline has continued in the years since the pandemic.

Irish pub closures since 2005. Image: Drinks Industry Group of Ireland

Mr Foley said there are a range of reasons why the west has been harder hit than the east.

“In the east, we’ve seen massive growth in population, a younger population, a more concentrated population and maybe, starting off, a smaller penetration of pubs per bundle of population than would have been the case in the rest of the country,” he said.

“Obviously that concentration of pubs reflects a pattern reflecting population many days gone, as it were.

“So, you go back to the 1900s, the population would have been more focused on the western part of the country.

“It would have been more focused on rural areas and then, as those populations change, we get this large number of pubs which can’t survive in particular areas.”

Hospitality VAT

The report comes as representatives of the hospitality sector meet with the Ministers for Finance and Public Expenditure to continue their calls for a return to the 9% VAT for food and accommodation businesses.

The meeting with Jack Chambers and Paschal Donohoe comes as the Restaurants Association of Ireland (RAI) warns that around 600 businesses have been forced to close their doors since the Government hiked the rate to 13.5% last September.

Among the restaurants closing their doors in recent weeks were Dublin landmarks Ukiyo, the Rustic Stone and Brasserie Sixty6.

The Government has previously insisted that returning to the 9% rate would cost “well in excess of €700 million”.

A half drunk pint of Guinness in an old Irish pub, 25-1-15. Image: Radharc Images / Alamy

As part of the pub closures report, DIGI surveyed almost 600 pubs and restaurants across Ireland and found that almost one in four had seen their business costs increase by 20-30% in the last two years.

Some 15% said their business costs had increased by over 40% in the last two years.

Nearly one-quarter of businesses said they would invest if the Government offered them a return to 9%.

Supports

Mr Foley noted that VAT cuts would have helped many of the pubs that closed in the last 20 years – although only those that offer food services.

He said a reduction in alcohol excise would be of more use to those that do not.

“Any reduction in tax improves the commercial viability of enterprises,” he said.

“Because remember, these taxes are basically taking a chunk of money that the customer gives to the pub and the Government then takes it so it doesn't go to the entrepreneur or the enterprise.”

Hospitality

The hospitality VAT rate was originally reduced to 9% in July 2011 due to the financial crash.

It remained at that rate until 2019 before being reduced again when COVID hit.

The return to 13.5% was announced in last year’s budget and implemented in September.

Excise

Ireland currently has the second highest overall alcohol excise duty in the EU and UK.

The country has the second highest excise tax on wine, the third highest on beer, and the third highest on spirits.