Uncategorized

Beer market down 6%

The total value of the beer market in Ireland fell by six per cent or €200 million last year from €3.3 billion to €2.6 billion, according to figures from Heineken Ireland which grew its share of the market by 0.2 per cent organically to 26.3 per cent on a turnover of €402 million compared to 2009.

This was mainly thanks to a strong performance from Heineken and the licensed Coors Light brands — particularly in the on-trade.

In a statement which did not go into its own volume declines in 2010 the company claimed, “Coors Light significantly outperformed the Irish beer market in 2010 with growth of 6.2 per cent,” adding that it was the top-selling bottled lager in the on-trade in 2010.

Murphy’s and Beamish stout sales declined in line with the stout market and the outlook for the beer market remains challenging since pubs, which account for 64 per cent of beer sales, depend on disposable income, stated HI, which claimed over 51 per cent of on-trade lager sales. The company is now the top supplier of lager to the marketplace here and Heineken remains the top-selling lager brand with over 41 per cent of the on-trade.

The 20 per cent excise reduction on alcohol in 2010 “no doubt had the desired effect on arresting cross-border purchasing resulting in six per cent growth in the off-trade sector in 2010”.

However, “Severe constraints on credit, combined with levels of consumer disposal income spend being stretched, will certainly make it tough for all to compete and in reality 2011 will be another tough period for the industry,” stated the company, predicting that “some form of stimulus is needed here to arrest the decline of the Pub segment in the Irish marketplace of today”.

At 19.9 litres of pure alcohol, per capita beer consumption continues to fall and is currently back at mid-1990 levels, marking a 20 per cent decrease from 2001 levels.

Parent company Heineken nv’s acquisition of FEMSA early last year helped boost it’s pre-tax profits by 37.7 per cent to €1.97 billion in the year to the 31st December last on sales of €16.1 billion, up by 9.74 per cent on the previous year.

However volumes and values declined by 1.7 per cent and 2.2 per cent organically.

In 2011, the company expects an improving economic environment in Europe and the US. But the impact of austerity measures and high unemployment is expected to result in continued cautious consumer behaviour in these markets.
“Group beer volume in Western Europe declined 3.5 per cent on an organic basis as a challenging economic environment impacted consumption, particularly in on-trade channels in Italy, Spain, The Netherlands, the UK and Ireland.”

Turning to 2011, the company expects an improving economic environment in Europe and the US, but warned that the impact of austerity measures and high unemployment “is expected to result in continued cautious consumer behaviour in these markets”.

In Europe, where the Heineken brand slipped 0.7per cent, Heineken intends to shift its prime focus towards volume and value share growth with increased investments in marketing and innovation in Heineken and other key brands, further supported by the international roll-out of higher margin brands, stated the company.

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