Mr. Paul Clancy:

I thank the committee for the invitation to attend today's meeting. I am joined by the VFI president, Mr. Paul Moynihan, a rural publican from Donard, County Wicklow. As VFI chief executive, I would like to welcome the publication of the general scheme of the Bill. For many years we have been promised legislation that would modernise the various laws that govern the sale of alcohol so it is positive to see such legislation coming to pass.

At the outset, it is important to note that through this new piece of legislation the sale of alcohol will remain a restricted practice, a decision by the Department of Justice which we very much endorse. The seven-day licence is recognised by the Minister as the cornerstone of the licensing trade and the commitment to retaining its relevance is an important point. We also welcome that the legislation states that all licence applications, including licences for restaurants, hotels and all other venues selling alcohol, will be processed through the District Court, a recommendation contained within the VFI’s original submission 12 months ago.

As a key stakeholder in the process, the VFI understands any consolidation of existing licensing laws will have a sizeable impact on its members - the holders of seven-day licences. This impact is most evident through the issue of extinguishment, the process whereby a new pub can open only when an existing licence is first transferred or, as its technically known, “extinguished”. Our members are gravely concerned about this section. If enacted as presented, new entrants to the pub market will no longer need to extinguish an existing licence to commence trading. As a consequence, the VFI argues that the number of pubs in rural Ireland will decrease, the exact opposite of what the Minister for Justice says is intended to happen.

According to the Department of Justice, removing the current requirement to extinguish an existing licence will stimulate the growth of new pubs in rural areas. This is a flawed premise. Pub numbers in rural areas are in decline and not because of the lack of licences. Research undertaken by Anthony Foley from the DCU Business School demonstrates that, since 2005, 1,829 pubs, or one in five venues, have closed. While making licences easier to obtain would theoretically benefit the consumer by increasing the number of pubs, one could reasonably argue that existing pubs will suffer as a result of an increase in supply in what is already an oversaturated market.

For the record, there are more than 10,000 on-trade licences in operation in Ireland at present and more than 7,200 of these are pub licences. That is one pub for every 496 adults in the country, so competition is part and parcel of the pub sector. The issue is sustainability. The Irish pub trade is run by publicans who, in many cases, are operating pubs that have been in their families for generations. These family-run pubs play an integral role in the country’s tourism offering. Tourists to Ireland mention visiting pubs as one of the main reasons they come here. We need to protect this valuable cultural asset.

The majority of rural publicans run businesses that turn over less than €190,000 per annum, so these are not large businesses. The typical pub is a community centre as much as a pub and, as already stated, the publican plays a vital role in that local community. In fact, the cultural value of our pubs is so important that the VFI is in the process of applying for pubs to join the UNESCO list of intangible cultural heritage, which protects the world’s living heritage. We are also working with the Minister, Deputy Heather Humphreys, and the Department of Rural and Community Affairs in relation to the pubs as community hubs pilot programme that seeks to reinvent what the rural pub can offer local communities.

Any form of deregulation will precipitate the closure of many of these pubs as the owners decide to exit the business in the face of unsustainable competition. While the adage “the market will find its level” is strictly true, it fails to take into account the cultural and community value of existing pubs. Other sections of the Bill are also of some concern, notably the cultural amenity licence. Exact definitions are required for venues and types of events that qualify for this licence, along with confirmation that all licence applications will follow the same criteria.

In summary, our message is “let’s keep rural pubs alive.” We hope this Bill will be amended to help secure that aim. I thank members for their time and we are happy to address any questions they may have.