Government must address runaway costs that are threatening small businesses in the hospitality sector, says the Vintners’ Federation of Ireland (VFI). Pubs, which play such a vital role in local communities across the country, are facing an enormous cost burden that threatens to permanently damage the trade.

The VFI was responding to the publication of a Government report, which states that smaller hospitality firms could see their wage costs “increase by 14.5% in 2024 and 36.7% by 2026, respectively (when the full impact of the transition to a Living Wage is accounted for),” the report states.

Pat Crotty, VFI Chief Executive, says: “This report proves that small businesses are bearing the brunt of a Government policy to introduce a living wage, pension auto enrolment and increased sick leave, all of which come at a massive cost to publicans. Our members can’t absorb such a dramatic increase in their cost base to the point that many will be forced to close.

“The Government report admits that the hospitality sector will be the ‘most affected’ by these changes so it’s the responsibility of Government to do something about this mess.

“It’s astonishing to us that in this report the Government states that ‘where additional payroll costs do arise, however, these are not a cost to the economy’. This completely ignores the impact on our members who have to foot the bill.

“We’re calling on Government to introduce a more realistic time-frame for the introduction of the living wage, as 2026 is too soon for publicans who are fighting to survive. The trade also needs meaningful supports and not the ‘suite of measures’ Minister Coveney announced. An enterprise hub and a top-up for the energy efficiency grant will not help pubs struggling to cover the weekly staff wages. In effect, the minister is asking publicans to spend money to receive funding, which is simply not tenable,” said the VFI Chief Executive.