The End of the Irish Pub?

The Irish pub, once a cornerstone of the country’s social life is undergoing a rapidly expanding assault on the viability of its very existence with closures mounting at an alarming rate. This has not only eroded their role as the locations where key social and cultural traditions were expressed, supported and maintained, it has also had a devastating impact on the economic vitality of the sector as can be seen from a recent report from the Drinks Industry Group of Ireland (DIGI).

This report reveals that 2,119 pubs or approximately one in four, have shuttered since 2005, with an average of 112 closures annually.

This trend which is particularly acute in rural areas threatens not only Ireland’s cultural heritage but also its tourism-driven economy.

The DIGI report, compiled by economist Anthony Foley, paints a stark picture. Between 2005 and 2024, Ireland’s publican licenses dropped from 8,617 to 6,498, a decline of 24.6%. Rural counties have been hit hardest, with Limerick seeing a 37.2% reduction in pubs, followed by Offaly (34.1%), Cork (32.7%), and Roscommon (32.3%).

Dublin, by contrast, experienced a modest 1.7% decline, underscoring the urban-rural divide. Since 2019, the closure rate has accelerated, averaging 128 pubs per year, with 600 to 1,000 more closures projected over the next decade without intervention.

The crisis has however been brewing for some time as Ireland’s Licensed Vintners Association (LVA) submission to the Joint Oireachtas Committee on Media, Tourism, Arts, Culture, Sport, and the Gaeltacht on March 23, 2021, demonstrates.

The LVA pointed out at that time that while the Dublin licensed trade, representing 30% of Ireland’s on-trade market and employing 12,000 people pre-Covid, faced unprecedented challenges during the pandemic.

Traditional “wet” pubs, late bars, and nightclubs were closed for 372 days by March 2021, with no trading permitted since March 15, 2020. Food-serving pubs fared slightly better, operating for just 105 days (28% of the time) between March 2020 and March 2021, enduring three lockdowns and restrictive outdoor trading limits. The LVA correctly projected that, without significant government support, many businesses would face closures extending into a minimum of 15 months by June 2021.

Ireland’s pub closure crisis is not an isolated phenomenon, however. It reflects broader European trends, albeit with unique intensity. Across the EU, traditional pubs and bars face pressures from changing consumer habits, rising costs, and regulatory burdens.

In the UK, the British Beer and Pub Association reported 29,000 pub closures between 2000 and 2020, with an average of 1,450 per year which is proportionally higher than Ireland’s rate given the UK’s larger population. In Germany, the number of traditional beer halls has declined by roughly 10% since 2000, driven by younger generations favouring urban nightlife or home consumption.

However, Ireland’s closure rate of 24.6% over 19 years is notably steep compared to countries like Spain, where the bar and restaurant sector contracted by about 15% over a similar period, or France, where closures have been less severe at around 12%.

A key factor distinguishing Ireland, and a point repeated ad nauseam by the LVA and drinks industry is its excise duty which remains the second highest in the EU after Finland.

Ireland’s excise on spirits is the third highest, on wine the highest, and on beer the second highest in Europe. This tax burden, combined with a 23% VAT rate, places immense pressure on pubs, particularly small, family-run establishments in rural areas.

In contrast, countries like Germany and Spain maintain lower excise rates (e.g., Germany’s beer excise is roughly one-fifth of Ireland’s), allowing greater operational flexibility for hospitality businesses. The LVA and DIGI argue that Ireland’s punitive tax regime exacerbates closures, a view echoed by industry leaders like Donall O’Keeffe, who calls for a 10% excise cut to bolster viability.

Beyond the economic perspective however, it is important to recall that the Irish pub is more than a place to drink; it is a cultural institution. Pubs have along served as community hubs, fostering social bonds, reducing isolation, and preserving traditions like storytelling, music, and local gatherings. In rural areas, where populations are smaller and social outlets scarce, the loss of a pub can devastate community cohesion.

Economist Anthony Foley notes that Ireland’s 6,680 remaining pubs are “at the cultural and social heart of their communities,” supporting relationships and reducing isolation. Their closure risks fraying the social fabric, particularly in counties like Limerick and Roscommon, where over 30% of pubs have vanished.

Tourism, a vital economic driver, also suffers. Pubs are a cornerstone of Ireland’s global image, drawing visitors seeking the authentic experience of a pint in a cozy, historic setting. Counties like Kerry (413 pubs), Cork (856), and Donegal (334) rely heavily on pubs to support tourism infrastructure. The loss of 1,937 pub locations since 2005 diminishes the availability of these cultural touchstones, potentially deterring visitors. Foley estimates that this reduction equates to “1,937 fewer locations for visitors to find and benefit from services such as food and entertainment.”

This being said, the economic toll that is emerging is severe. Pubs are small businesses, often family-run, that employ thousands and contribute to local economies through purchases, wages, and taxes.

Nationwide, the hospitality industry supports youth employment and economic activity in both urban and rural areas. The LVA’s Oireachtas submission highlighted this aspect of the sector’s role in reducing youth unemployment, which was a priority for post-pandemic recovery.

However, high operating costs, exacerbated by government policies, have continued to threaten this contribution. The LVA notes that 48% of Dublin pubs serving food reported business declines due to a VAT increase, with 70% less likely to hire new staff as a result. The DIGI report identifies the “high cost of doing business” as a primary driver of closures, citing Ireland’s second-highest EU excise rates and a 23% VAT rate. These costs, combined with post-Covid challenges like reduced tourism and changing consumer habits (e.g., increased home drinking), create a perfect storm for rural pubs operating on tight margins.

The LVA’s call for enhanced financial supports reflects the sector’s dire straits. This includes the LVA advocacy for extending the 9% VAT rate for hospitality to beyond 2025 to aid recovery. Without such measures, the LVA estimates the projected loss of another 600 to 1,000 pubs over the next decade could further erode economic vitality, particularly in rural regions.

there is little doubt then that the scale of the crisis demands a balanced response. The LVA and DIGI argue that government intervention is critical, particularly through tax relief. A proposed 10% excise cut could alleviate pressure on pubs, aligning Ireland’s tax regime closer to EU peers like Germany or Spain.

The anticipated but by no means guaranteed reduction of the VAT rate for food-serving pubs to 9% in budget 2026 is a step forward, but broader measures are needed to address the plight of wet pubs, which face prolonged closures and stricter regulations. The LVA’s insistence on eliminating the “artificial distinction” between food and wet pubs post-vaccination underscores the need for equitable treatment across the sector.

Beyond taxation the LVA highlights issues like banking, lease disputes, staff retention, and skills training, all of which require coordinated policy responses. The decline in alcohol consumption to average EU levels suggests that high excise duties are no longer justified, particularly as they disproportionately harm rural pubs. As Donall O’Keeffe warns, “Once closed, such pubs rarely re-open,” signalling a permanent loss to Ireland’s cultural and economic landscape.

The closure of over 2,100 pubs since 2005 marks a profound loss for Ireland. These establishments are not merely businesses but repositories of tradition, community, and economic activity. The accelerated closure rate post-Covid, particularly in rural areas, reflects a confluence of high taxes, regulatory burdens, and shifting social habits.

Compared to EU peers, Ireland’s punitive excise and VAT rates exacerbate the crisis, placing its hospitality sector at a competitive disadvantage. Without swift action through tax relief, financial supports, and equitable reopening policies, the projected loss of another 1,000 pubs could irreparably damage Ireland’s cultural heritage and tourism economy.

The government must act decisively to preserve this vital institution before more communities lose their last remaining pub.