Pubs Warn Of "Tipping Point" Amid Pint Price Hike

Pubs have issued warning that a 4 cent rise in the price of a pint, along with the imminent VAT increase, will push the sector to the "tipping point".

This comes as the brewer Diageo, announced a 4c increase of its stout and beer products from today, just 6 months on from a 12 c increase was announced in February. Taking into consideration the tax and other costs, the price of a pint is set to rise by 10c overall. 

The increase in price also impacts Diageo's other products on its portfolio, including Guinness, Smithwick's, Carlsberg, Rockshore, Harp, and Hop House 13.

Reacting to this price hike, Michael O'Donovan of the Vintner's Federation of Ireland, has warned that the VAT increase from 9c to 13.5c, coupled with inflationary costs are threatening to hit the €2.5bn Irish pub sector hard.

“My concern is that, when you take everything together, it threatens to represent a tipping point for the sector", Mr Donovan said. “To be honest, it is the Vat hike that I am most concerned about,” he said. “Pubs have had to respond to changing market conditions, so food is now a key part of the offering in many establishments".

From next month onwards, Irish pubs, cafés and restaurants will charge VAT on food products at 13.5c instead of 9c, with the Government stating their intent on ending the special low VAT rate, which supported premises during the Covid pandemic. 

Mr O'Donovan who operates Cork's City centre's Castle Inn, also added, “We are doing everything we can to attract customers and to persuade people to come out to socialise – price increases make that harder. Though I still believe that Irish pubs offer a great value-for-money product in terms of socialising and general atmosphere".