Talk of deregulation is causing uncertainty on the Dublin pub market and beginning to effect prices, according to Tony Morrissey of Morrissey Auctioneers. Despite the record price of over £5.3 million (€6.7m) achieved last month for The Comet on Swords Road, Dublin 9, the market has peaked.

Since the start of the year, 16 Dublin pubs have been put on the market and six of them have failed to sell. Tony Morrissey attributed this to high expectations on the part of vendors - a hangover from the strong prices in 2000. John Ryan of Insignia Ellis Gunne said that while a "sensible realignment" of prices has occurred, there is still a lot of activity for well-located and well-run premises.

Last year was a landmark year for the licensed trade and while there were some record-setting prices, there were also a number of significant changes to licensing laws and the general economy that led to a re-evaluation of the capital values of many city pubs in particular. Auctions failed to meet vendor expectations and many pubs were withdrawn - only six of the 38 pubs that changed hands last year were sold at auction. The majority were subsequently sold.

Auctioneers advise more realistic price expectations, now that market conditions have changed. The Horse and Hound in Artane, Dublin 5, is an example of this: it was recently withdrawn from auction at £2 million (€2.54m), somewhat short of the £2.1 million paid for it 18 months ago. Vendors need to realign capital values with the current market, one agent pointed out.

Now that the Intoxicating Liquor Act allows the transfer of licences state-wide, the value of a pub licence has fallen. The £5.3 million (€6.7m) achieved by The Comet is also put down to the strong off-licence sales section, which accounted for £774,000 (€982,800) of the £2.5 million (€3.2m) turnover last year.

While last year's trend was for private treaty sales, Insignia's John Ryan contends that the auction room is regaining its popularity once again. "While vendors shied away from auctions last year, they are now reasonably confident once again. Although the value of a licence has fallen markedly, this has not been reflected in recent sales. Prices are holding on that front," he said.

Rising inflation, interest rates, wages and overheads have put a big dent in pub profits, according to Tony Morrissey. "The inflation rate, coupled with pressure on the economy and shortage in the labour force resulted in a continued increase in labour costs," he explained.

Meanwhile, banks and lenders are feeling overexposed in the market and are curtailing lending. "So a lot of guys have decided to get out of the trade," Morrissey said. The introduction of longer hours under the Intoxicating Liquor Act 2000 coincided with the arrival of the 39-hour working week and minimum wage.

Tony Morrissey believes that deregulation has had less impact on the market than rising wage and market conditions. "Regardless of changes to the licensing laws or deregulation, there will always be a market for a good traditional pub. The `paddy' culture will always ensure that there's demand for the pub; while you can drink wine and beer in restaurants and bistros, the ethos of Irish culture is hard to change," he said.

According to John Ryan, "The word deregulation is being misused by a lot of people, it is not the same as deflation of prices and will not bring about a drop in the price of drink. People's choice of pubs is not price-driven, and this is especially true of younger drinkers who choose a bar based on music, decor and crowd."

Another noticeable trend is that more and more city centre pubs are not opening to the public until 5 p.m. or later and many have begun to close on Sundays. Trendy city centre bars like Fireworks, Coyote, Bobs and others forsake lunchtime trade for after-office business.