60% of all alcohol sales now via off-trade

Overall drinks market and alcohol consumption levels in Ireland were essentially static last year due to the to the deep recession and changing consumption patterns, according to the Drinks Industry Group of Ireland which has just published a new report, Drinks Market Performance 2011 by Anthony Foley of DCU Business School.

The figures indicate that the overall alcohol market increased marginally by 0.17 per cent last year. However with the increase in adult population average consumption levels decreased to 11.7 litres of alcohol, a level last seen in the mid-1990s.

The report shows that in 2011 the total value of bar sales declined by 7.2 per cent with a 5.5 per cent fall in sales volumes. Ireland’s pubs, bars, hotels and restaurants are therefore continuing to suffer major declines with a knock-on effect on local businesses and revenues.
In particular, the declines in bar sales are having a significant impact on jobs in this employment-intensive sector where over 5,000 pub jobs have been lost in the last two years.
The declines in the on-trade were offset by a five per cent increase in off-sales, continuing the structural shift in the drinks trade towards home consumption. The majority of these sales were generated through large retail multiples with the independent off-trade representing a diminishing share of sales.
Due to the decline in bar volumes and the increase in home consumption, off-sales now account for almost 60 per cent of all alcohol consumed in Ireland.
The DIGI said that the prospects for the drinks market in general and the hospitality sector in particular 2012 remain weak as a result of low levels of economic growth and declining consumer spend.
DIGI Chairman Kieran Tobin commented, “From 2008-2011 alcohol sales in Ireland fell dramatically through the onset of the recession and downturn and as a result of cross-border trade. The on-trade in Ireland is currently operating at only 70 per cent of its 2007 level.
“The situation remains fragile with pubs, bars, nightclubs, hotels, restaurants and independent off-licences continuing to close as a result of consumers not spending. This has obvious consequences for the 62,000 jobs across the manufacture, distribution and sale of alcohol as well as for businesses and communities throughout Ireland.

“The Government reduction in alcohol excise by 20 per cent in December 2009 helped arrest cross-border shopping and has stabilised the overall market. Further measures such as last year’s reduction in VAT on tourism-related activities have had a tangible positive impact on the hospitality sector and on reducing prices. DIGI welcomes all such initiatives and asks the Government to maintain them.
“While Irish drinks exports continue to perform strongly on international markets, this success is founded on a solid domestic base. In this regard, we look forward to working with the Government to find ways to assist our industry at home by incentivising consumers to go out, socialise and spend money in the wider hospitality sector while simultaneously identifying new markets for our products abroad.”
A full copy of the report is available at www.drinksindustry.ie

Sign Up for Drinks Industry Ireland

Get a free weekly update on Drinks Industry trade news, direct to your inbox. Sign up now, it's free