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Beverage exports up 12% in 2010

Beverage exports increased 12 per cent in 2010 to €1.19 billion from €1.06 million “despite ash clouds and recession”, with the strongest-performing categories being whiskey, cream liqueur and beer, according to Bord Bia in its review of 2010 and prospects for 2011.

Cider exports improved as the year progressed with a stronger performance in the UK combined with increased sales to North America and Spain helping growth in the trade.

The 2010 beverage performance was driven by growing strength in the Travel Retail sector. Liquor ranks as the second-largest category after cosmetics/fragrances and represents an ideal ‘shop window’ for Irish companies interested in targeting travel retail/duty free and international customers. The Chinese and Indian duty-free markets are booming as is Latin America while the Middle East remains strong. North America and Europe show signs of recovery. Many international airports are increasingly developing speciality whiskey/whisky shops.

The 2010 performance was also driven by the restocking of markets which had experienced de-stocking in 2009. However price pressure remains a significant factor in the export market.

Generally, the prospects for beverage exports remain positive for 2011 with stronger demand likely to be maintained while emerging markets continue to increase purchases of Irish beverages, reported Bord Bia.

But it warned that the sector faces challenges in the form of higher dairy and other raw material prices (to which other exporting countries will also be subject) and the likely abolition of intermediary excise tax relating to wine-based cream liqueurs which is likely to substantially raise prices for such products.

Irish food and drink was a major contributor to the economy’s strong export performance in 2010.

“It’s a ‘good news’ story,” commented Bord  Bia Chairman Dan Browne, “Exports grew 11 per cent to reach €7.9billion, an increase of €800 million. Exporters have rarely expressed such confidence in the future”.

The expansion in food and drink exports outpaced the increase in total merchandise exports and is estimated to have accounted for almost one-third of total growth during the first nine months of 2010.

A food industry survey conducted by Bord Bia in December last year found 70 per cent of exporters expressing ‘very good’ prospects for 2011 with 64 per cent increasing their sales forecasts for the year ahead and 84 per cent managing to maintain increased employment levels.

91 per cent of respondents to this survey regarded control of business costs as being a significant factor in driving business success over the next 12 months while 83 per cent regarded increased demand in key export markets to be a significant factor.

However Bord Bia Chief Executive Aiden Cotter pointed out that more consumers feel that their purchasing power will decrease rather than increase with some 45 per cent expecting to have to cut back on spend although they’ll still allow themselves the occasional luxury, according to Eurostat research.

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