Many pubs won't survive living wage, claim VFI

The Government must delay their plans to introduce a 'living wage' if pubs are to survive, claim the Vintners’ Federation of Ireland (VFI).

The VFI are pointing to the impact on publicans when the minimum wage is scrapped in favour of the 'living wage' (60% of the median wage), which the government pledge to introduce as law in 2026.

The current 'living wage' if applied in Ireland would see all staff receive at least €14.80/hr; up from the calculated figure of €13.85/hr from 2022/23.

Meanwhile the 'Minimum wage in Ireland - which is currently enforced - is €12.70/hr for those over 20 years old.

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.