New report shows hospitality sector struggling to keep pace with rising costs
Drinks Ireland welcomes the latest Drinks Industry Group of Ireland (DIGI) report authored by economist Anthony Foley, Associate Professor Emeritus at Dublin City University.
The report highlights that pubs and the wider hospitality sector are struggling to keep pace with rising business costs which are significantly outpacing inflation and threatening the viability of many venues.
The research reveals that while the overall consumer price index rose by 7.5% between July 2023 and July 2026, core operational costs for the hospitality sector increased by double-digit percentages. Because the sector is highly labour-intensive and predominantly composed of small enterprises operating on slim margins, these businesses have limited capacity to absorb sudden financial shocks.
- Energy: Overall energy prices increased by almost half (48.8%) in the three years to July 2026, with electricity prices specifically surging by 61.7%.
- Insurance: Despite expectations of a decrease following sector reforms, insurance costs rose by over a quarter (26.6%) during the same period.
- Labour and wholesale: The sector experienced a 15% increase in labour costs alongside a 12% rise in wholesale beer prices.
To alleviate this unsustainable cost burden, DIGI is calling for an immediate ten per cent excise duty reduction in the upcoming Budget to protect small, family-owned pubs and hospitality venues across the country.
