A transformation of licensing laws could sound the death knell for rural pubs, publicans have warned.

The Sale of Alcohol Bill proposed a major modernisation of the licensing laws in Ireland. This includes ending the extinguishment requirement where a new operator cannot enter the pub trade without first acquiring an existing licence.

The Oireachtas Justice Committee yesterday heard concerns around this from the industry. Donall O’Keeffe, chief executive of the Licensed Vintners Federation, said they welcomed many sections of the Bill, but raised concerns over non-licensed premises being able to apply for late trading licences.

He also raised concerns about cultural amenity licences, outlining a risk of them being used as a "backdoor entry into the licensed trade".

Mr O’Keeffe said their main concern is the proposed change to the extinguishing requirement, which currently means a new operator cannot enter the pub trade without first acquiring an existing licence.

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He said Ireland is "severely overpubbed", and that there are 6,800 pub licences, while 1,800 pubs have closed since 2005, "confirming a total oversupply".

Mr O’Keeffe said: "Removing the extinguishment requirement will not achieve the… objective of enhancing rural pub viability and will prove to be a failed political initiative."

Paul Clancy, of the Vintners’ Federation of Ireland (VFI), echoed concerns about ending the extinguishment requirement. "Our members are greatly concerned about this section; if enacted as presented, new entrants to the pub market will no longer need to extinguish an existing licence to commence trading," he said.

Mr Clancy added: "As a consequence, the VFI argues that the number of pubs in rural Ireland will decrease."

Matt McGranaghan from the Music & Entertainment Association of Ireland said local pubs are often the first introduction for artists to performing in public. "The music and entertainment industry is intrinsically linked to and affected by the licensing system in Ireland," he said.

Sunil Sharpe of the Give Us The Night group described a downsizing of the nightclub industry. He said there are currently around 85 nightclubs in Ireland, compared with a total of 328 in 2008. He accused the Government of "going out of its way to obstruct the industry by providing no workable licence, ending late opening on Sundays and piling on unaffordable licensing costs which caused many venues to shut".

"It cleared the dancefloor," he added, urging lower licensing costs. However, Peter Mosley, from Independent Craft Brewers of Ireland, welcomed many of the measures in the Bill, including the abolition of the licence extinguishment requirement, which he said led to "anti-competitiveness in the market". He said: "As a modern society, we are changing and evolving and this includes the settings in which we may want to consume both alcoholic and non-alcoholic drinks."