''Any occupancy of the first floor should be terminated immediately.''
The decision left Mrs Annan gutted, but she said she was not going to force the building's owner to battle the council - instead her family would move on.
Duntroon resident Carol Polaschek said the pub was the heart of the village where people gathered to share their sorrows and joys.
''If the pub goes, this whole village dies.''
Otago Chamber of Commerce chief executive Dougal McGowan said it was increasingly difficult to run rural pubs; each area faced its own challenges and opportunities.
''Regular local clientele will have dropped off in recent years due to a variety of factors, including the changing of the drink-driving laws and lower blood alcohol tolerance rates.
''Those that are off the tourist routes or cycleways find it more difficult to attract and maintain customers and high quality staff. Those on the tourist route, and the newly developed and developing cycleways, also face similar issues as they have to pay higher pay rates to attract quality staffing. Additionally, they also face higher redevelopment costs which are needed to create the enhanced experience that travellers now need and want.''