Groups representing over 5,500 publicans today announced a year-long price freeze on drinks with immediate effect.
The Licensed Vintners’ Association (LVA), which represents publicans in Dublin, and the Vintners’ Federation of Ireland (VFI), representing publicans in the rest of the State, made the announcement on behalf more than 5,500 publicans.
The two organisations said the move was being made due to the deteriorating economic situation and the growing pressure on consumer spending.
The groups said that 1,500 pubs had closed since 2001. A decade ago pubs accounted for 66 per cent of the drinks trade, a figure that is now below 50 per cent. Between 2001 and 2007, alcohol consumption has dropped by 7 per cent.
“In financial terms, 2009 is going to be a difficult and challenging year for everyone and we recognise that people are going to be under real pressure to tighten their belts," they said in a joint statement. "This commitment reflects our members concerns that the pub trade should do its bit in terms of keeping costs down and providing value for money.”
Louis Fitzgerald, chairman of the LVA, and Val Hanley, president of the VFI, added: “In both organisations, publicans from across the country have contacted us to express their concerns at the worsening economic conditions and their wish to do something to respond to the situation. We believe the freeze will be honoured by the vast bulk of our members across the country.”
The two bodies also called on the drinks suppliers and manufacturers to support the freeze by not exceeding price structures over 2009, saying any attempt to exceed current pricing levels "would provoke an extremely negative response from consumers".
The LVA and VFI said they were not not advocating members sell at any particular price, however, and that it was up to publicans to decide upon their resale prices.
"We’re simply saying that our two organisations are committing our members to not exceeding the current price levels which they apply to drink products over the next 12 months.
"Should individual members wish to compete at prices below those they charge today, they are of course entirely free to do so.”
The groups also welcomed comments from the Minister for Finance that there would not be a mini-budget next year, "given that Ireland has the highest alcohol taxes in Europe".
Speaking this afternoon, Ann Fitzgerald, chief executive of the National Consumer Agency, said she broadly welcomed the price freeze. However, she added: "We [the NCA] would be more interested if the emphais was placed on reducing prices."
On Friday, the biggest pub group in Dublin, Thomas Read, went into interim examinership amid efforts to rescue the business.
The decision to seek examinership suggests that any uplift in trade in the busiest period of the year is unlikely to lessen significantly its financial difficulties.
Thomas Read - operator of well-known drinking establishments such as the Bailey, Ron Black's, the Globe and the Harbourmaster, and the Winding Stair restaurant and Rí Rá nightclub - is indebted to the tune of €26.7 million. The company has 13 outlets in Dublin and eight bars in Dublin airport.