JD Wetherspoon and the battle of the beer prices

When news that JD Wetherspoon was breaking into the Irish pub trade emerged last year, it was greeted with strong resistance in some circles. An outsider might have been forgiven for thinking the clock on 800 years of colonial oppression had been reset to zero.

An English pub chain? In Ireland, the place that gifted the world the quintessentially convivial pub? It was unthinkable.

Letter writers and columnists lined up on these pages to express their dismay and outrage that such a thing could come to pass. For some, the cheap beer Wetherspoon promised was as problematic as its inherent Englishness.

The ire of the critics will most likely count for nothing, however, and over the next five years JD Wetherspoon will open 30 pubs in the Republic at a cost of about €50 million. It has already opened two: the Three Tun Tavern in Blackrock, Co Dublin and the Forty Foot in Dún Laoghaire.

There will be two more pubs, in Swords and Blanchardstown, over the next year, followed by a further two, in Cork and Waterford. There are also plans for a 100-room hotel and pub on Dublin’s Camden Street. So make no mistake, Wetherspoon is here to stay.

Much of the hand-wringing in recent months has focused on the harm a chain such as Wetherspoon could do to the reputation of the Irish pub both at home and abroad.

On the surface, such concerns about the welfare of what must count as one of the county’s most remarkable exports seem ridiculous, but they are not entirely without foundation.

The pull of the Irish pub

A Fáilte Ireland survey of visitor attitudes from 2013 declared that the thing tourists most loved about a visit to Ireland was live music in a pub, while tasting Guinness was the third most beloved thing. Neither live music nor Guinness will be found in an Irish Wetherspoon.

What will be found, however, is likely to strike a chord with locals more than tourists: cheap drink. Wetherspoon has been drawing punters through its south Co Dublin doors with the promise of pints of stout and lager for just €2.50, while bottled craft beers from the US and UK cost €2.45. The dearest pint of draught lager is €2.95.

To put such prices into context, a pint of Guinness costs €5 in the Palace Bar on the fringes of Temple Bar, while a pint of Heineken costs €5.40. Of course, there are huge variations in the price of a pint across the State: a pint of the black stuff in Tigh Neachtain in Galway costs €4.30, while a pint of Heineken will set you back €4.90. This is cheaper than the Palace, for sure, but still much dearer than Wetherspoon.

Pricing aside, what is perhaps most interesting about the Wetherspoon phenomenon is the way it has upset the big players in the Irish market – the multinational giants Diageo and Heineken – and revealed in the process just how badly served consumers here have been over the last two decades.

The two multinationals will protest their innocence – although they would not be interviewed for this article – but the undeniable reality is that they have been the two major players for decades, and Irish consumers have been paying a very high price. Diageo and Heineken’s share of the pub sector – coupled with the greed displayed by some Irish publicans and the high VAT and excise duty applied to alcohol in Ireland – have meant that pints in Dundalk are a lot more expensive than they are a few miles across the border in Newry.

Publicans and brewers blame a higher cost base in the Republic for price discrepancies between Dublin and Belfast of more than 40 per cent, but JD Wetherspoon isn’t buying it.

Last summer it confirmed that it would operate here “for the long-term” without Guinness, Budweiser, Carlsberg or Smithwicks – or any other Diageo products – unless the brewing giant agreed to lower its prices.

"I don't want to put pressure on Diageo, but we simply baulked at paying a higher price for Guinness in Ireland than we do in the UK," says Wetherspoon chairman Tim Martin. He would not say what the price difference between the two markets was, but informed industry sources have said the price of beer sold to publicans in Ireland is up to 20 per cent higher than in the UK.

The cost of doing business for a company such as Diageo may well be higher in the Republic, but it is not 20 per cent higher. According to the single report on the price differences between Ireland north and south published by Forfás, the price difference is closer to 8 per cent.

The row with Heineken

Next up was Heineken. When JD Wetherspoon first came to town, the brewer said nothing, but as the weeks passed it grew unhappy to see the pub upstart charging €2.95 for its “premium product”.

Or at least the intervention of some publicans made it less than pleased. As the evenings drew in last autumn, Heineken stopped supplying its beers to Wetherspoon in Dublin on the back of other publicans’ complaints directly to it about the pricing there.

In response Wetherspoon pulled Heineken’s products from its entire network of almost 1,000 pubs across the UK, which could have cost the brewing giant over €60 million a year. Last month, a deal was reached that saw Wetherspoon return all Heineken products to its UK pubs.

Not here, though. At least not yet.

The absence of Guinness from an Irish pub – or at least an English pub in Ireland – attracted headlines, as did the row with Heineken, but it does not seem to have done too much damage to the pub’s trade so far.

Conor Duffy from Killiney, who is studying in Blackrock, has only good things to say about new pub, the Three Tun Tavern, when Pricewatch pays it a visit. “It is very cheap. It is brilliant. The food is good, it is quick, it is clean, it is efficient, the staff are friendly. I can’t really say much else,” he says as he orders lunch.

Retired couple Joe and Kathleen Hennessy agree. “We can come in and get two cups of coffee and two little shots with them for €10 and we can sit down and relax,” says Joe. “And we can get something to eat that we can afford. We can’t afford to go into a restaurant and we can afford to go in here.”

“We are not from Blackrock but we are here 20 years. We have seen [the pub] change hands over the years, and this is the best change we have seen,” says Kathleen.

Orla Wilson from Blackrock says she normally comes here on Friday and Saturday nights. “There is a good atmosphere on weekends, but it could do with some live music,” she says. “Price is the really big draw. You could save a huge bit. You could easily save €30 or €40 here, and we would usually go here first to get the cheap drinks in before heading into town.”

Jonathan Fagan, a taxi driver from Walkinstown, is here for a meal with with his wife, brother and two young children.

“Three adults, two kids, all the soft drinks and a couple of glasses of wine and we got out for €55. And I have to say the food was quality – proper burgers and chicken breasts. It’s hard to beat that.”