The tumbling property prices in Ireland finally offered the convenient opportunity to British pub chains to respond to the booze fascination of the neighbour. During the property boom of 2007, about one pub among six in Dublin changed hands for almost 14 million Euros. About half of the pubs sold at around 7 million euros, making it impractical for the big British players looking for at least twelve openings to establish a network. However, recent developments in Ireland have been encouraging for the business.
Following the real estate bubble, the country was tethering on the brink of collapse. It had to undertake about 85 billion euros in debt from the EU and the IMF. However, recently Ireland successfully followed the recovery road and is now the first country of the Eurozone to bail out of the crisis. With the market desperately looking for new business at realistic pricing, the British businesses do not want to miss this opportunity to crack into this highly prospective market. The new rates are significantly less than the high price a few years back. Pubs are exchanging hands merely at the average rate of 800,000 euros. The highly unrealistic price had a significant negative effect on the Irish booze market as the revenues reduced by about a third and above 1000 family-run businesses had to close down permanently.
However, the British businesses are smelling a huge vacuum of opportunity here. The reports from the Central Bank note that the average Irish native pub now owns a debt of around 270,000 euros. This implies that the agents of the British pub chains would be open to exploit this vulnerability and get a greater negotiated price than before. JD Wetherspoon, the British network with more than 880 centers is the first British chain to invest in Ireland. They recently agreed to open two sites in suburban South Dublin to test the market waters. It has plans to establish a network of around 30 pubs in the country. Tim Martin, the founder chairman of Wetherspoon pointed to a tentative roadmap of five to ten years to complete the infrastructure. There are also reports that the ‘Greene King’ chain is also planning an entry foothold in Ireland. However, the Greene King refused to elaborate on the matter.
In another interesting turn of events, David Kelly, the Dublin native booze entrepreneur who operates the Ri Ra chain in the US, also planned to get back to the home country with plans to establish a network. These significant business efforts aim to target the Irish drink consciousness, which has fabled reputation among alcohol enthusiasts all over the world. Despite the recent financial hardships, Ireland remains to be defiant to pressure, and drinks in annual average per capita alcohol consumption of 11.6 liters. The financial downturn just saw the drinkers turning away from pubs and getting their drinks from the supermarkets and off-license shops that together contribute to around 60 percent of the total sales.
However, ground realities put another interesting twist to the story. Irish customers have very strong brand loyalty from a deep placed nationalism. They also share a deep obsession with a certain local black beer and sport a general uneasiness about their neighbour. A commentator at the Facebook page ‘Feck off Wetherspoon’ commented that they must ‘protect themselves from becoming more British than the British themselves.’