Vintners fears over wage rise 'tsunami' aired at annual conference in Ballybofey

The national living wage will be a death knell for Ireland's pub trade and the country's tourism and hospitality sectors, the Vintners' Federation of Ireland annual conference heard.

The meeting, held at Jackson's Hotel in Ballybofey, heard calls for the Low Pay Commission to be disbanded amid growing fears about rising business costs.

At present, 36 per cent of pub turnover is currently consumed by labour costs alone and that figure will increase to over 40 per cent with the introduction of a living wage.

“In the next two years, the cost of labour could go up by 36.7 per cent,” delegate Michael Farrell from Cork said.

“In real terms, that means having to pay an extra €3,670 for every €10,000 you'd pay in wages. It's impossible to get that back by price increases.

“The Low Pay Commission based a lot of it on the Dublin prices, but they are out of touch and not in the real world. All of that is grand when the price of a pint is €7, but in most of Ireland it's far from that. It's ludicrous.

“No other sector would accept this draconian increase.”

In December 2023, a minimum pay worker on a public holiday cost a publican €24.58 per hour, but by January 2026 that same worker could cost the same publican €34.81 per hour.

Mr Farrell said: “We won't be a tourism destination in another couple of years. We will be uncompetitive. In two years from now, a 20-year-old working on a public holiday will cost you €35 an hour.

“They are wiping out publicans and restaurants – and no-one is saying anything. This is a tidal wave, a tsunami coming towards us and we're far too quiet about it.

“They are throwing crumbs at us and we are sitting down and taking this bull. It is shocking. There will be no bank manager giving anyone money to buy a pub in the next two years.”

Mr Farrell also asked the VFI to urge the government to assume responsibility for employee sick pay with immediate effect

“Sick pay is a sick joke,” he said.” It is a most unjust double taxation on our businesses. We already pay PRSI – that should already be covering sick pay.

“If you have ten days of sick pay and you have ten staff, that could cost you €10,000 extra.

“It's like introducing ten more public holidays and this is just another nail in the coffin. If the Government is realistic, it should get rid of this. It has gone beyond a joke now.”

A recent VFI survey showed that 37 per cent of publicans are considering retirement within the next two years and 84 per cent reported that no family member wishes to inherit the pub.

“While the challenges of the Covid era receded, a new set of challenges emerged in 2023 and will continue to be felt for a considerable period,” VFI President John Clendennen said.

“Staff shortages, a tightening of the tourism market due to the ongoing Ukrainian conflict and the increase in the cost of doing business combined to make it a difficult year for members.

“The special hospitality VAT rate of 9 per cent was increased to 13.5 per cent in August after the VFI had successfully lobbied for a further extension from February.

“This remains very much a live issue and we continue to make strenuous representations about reintroducing the special hospitality rate.”

Mr Clendennen highlighted the issues faced due to what he called “a severe lack of public service vehicle”.

He said: “The simple act of getting customers and staff home safely is a major issue for publicans, in both urban and rural areas.”

Mr Clendennen said that “new, more flexible options must be explored” to allow people operate on a part-time basis and said the PSV licence structure should allow lift-hailing solutions such as Uber or Lyft to operate.

He said: “We need to shift customer perception that a night out will mean difficulty in getting home.”

One delegate countered: “If we can't get people home why are we getting them to stay later?”

The VFI will seek to have vaping banned indoors. Clare delegate Mark Kelly spoke on the motion.

“We have been made aware of other substances being added into these vapes,” he said. “They are highly dangerous.”

Mr Kelly told how he was aware of an employee taking a few drags of a vape in a pub and collapsing at the rear of the premises.

He added: “We are also aware that there is signage about vaping, but people still vape.”

While the motion carried, one delegate expressed a fear that a vaping ban would not be as readily accepted by modern young people as when the smoking ban was introduced in pubs.

“I think we will have problems trying to enforce it. We could find that younger people won't be as willing to obey.”

The VFI says it will also strive to address a gender imbalance on its management committee. There are ten males and no females on the management committee and the President says he will bring the names of two women to add to the body.

“We have to strive to be more inclusive,” Mr Clendennen said. “We need an element of diversity and female advice at our tables. The more diversity we have the better we can serve our organisation.”