Mr. Padraig Cribben:

I thank the Chairman and the members for the invitation to make the presentation today. The Vintners Federation of Ireland represent publicans in the 25 counties outside of Dublin. We currently have a membership of 4,000. The vast majority of these 4,000 outlets are family owned, family run, small businesses. Pubs must renew their licence each year and the fee payable is based on six different licence bands. Revenue issue figures showing the number of pubs in each band and they are as follows. A total of 53% of pubs with a turnover of under €190,500 per annum are in that licence band. Some 24% of pubs are in the licence band of €190,500 to €380,999. This is 77% of all pubs in the State have a turnover from alcohol of less than €4,000 per week. In the remaining four licence bands of €381,000 to €635,000 there are 10% of pubs, the €635,000 to €952,499 turnover band has 6%, the €952,500 to €1.27 million turnover band has 3% and there is a modest 4% of pubs that turn over more than €1.27 million. These figures show a vast accumulation of very small businesses where the control of every element of cost becomes critical.

Over the past decade alcohol sales in pubs has fallen by a third for a myriad of reasons that are not necessary to be recounted here. This reduction in sales has resulted in the above set of statistics. Notwithstanding these figures, pubs are still a major source of employment right across the country with in excess of 50,000 people currently in gainful employment in the sector. Over the past 12 to 18 months we have been increasingly exercised by calls from members in relation to significant increases in insurance. With that in mind we conducted a wide-spread survey of members in September of this year and the findings are quite instructive. A total of 88.3% of our members have seen an increase in insurance in the past two years with 38.5% of members seeing an increase of between 10% and 20% in the last 12 months. Increases of between 20% and 40% were seen by 39.5% of our members in the last 12 months and 12% have seen increases in excess of 40%. More frighteningly, 37% of members have indicated that they have experienced significant problems in insuring their business.

Like all businesses publicans have many costs to contend with and we asked our members to rank the costs that currently cause them most concern. The top three in order of concern were: business insurance, commercial rates and TV subscriptions. The third concern may surprise people who do not understand what happens in pubs but TV subscriptions can cost up to €1,000 per month. Clearly, business insurance is a cause of major concern within the trade and we have quite a bit of anecdotal evidence of some members experiencing extreme difficulty in getting adequate cover and some of these in situations where there would appear to be no enhanced risk from previous years. Over the past number of years we have seen a number of insurance companies declining to even look at or quote for business in the sector.

We can speculate forever as to the reasons for the current high cost of insurance and until there is more transparency within the sector it will remain mere speculation. We do know, however, that in Ireland the cost of settling claims is significantly higher than in most other European countries. We know that legal costs play a very big part in the total cost of a claim and we know that the collapse of various insurance companies has led to various increases in premium.

So what needs to be done? While the Vintners Federation of Ireland does not believe that it has the silver bullet solution, we believe addressing the following measures would go a long way towards bringing a level of sense back into the cost of insurance for businesses. Enhanced powers could be given to the Personal Injuries Assessment Board, PIAB, to determine liability on all public liability claims with very limited exceptions. In particular, all detail upon which a claim is based must be produced at the PIAB stage. An appeal from the PIAB stage should be such that it is only on a point of law. There should be no legal fees for either side at PIAB. There should be a review of the Book of Quantum with a view to bringing it into line with European norms. We know there are a significant number of fraudulent claims and there should be enhanced penalties for people found guilty of bringing fraudulent claims. Any alleged incident or accident must be reported to the company where it is alleged to have happened within 30 days of its occurrence. If the current position is allowed to prevail more businesses will close simply because they cannot access insurance or cannot afford it. There is still a window of opportunity to bring meaningful reforms that will allow businesses to survive and to continue to give employment but that window of opportunity is fast closing. Action is urgently required. I thank the Chairman for the opportunity and we are prepared to take any questions members may have.