New drinks industry report shows static domestic drinks market in 2011
The Drinks Industry Group of Ireland (DIGI) has published a new report, Drinks Market Performance 2011 by Anthony Foley of DCU Business School, showing that the 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.
The report shows that in 2011 the total value of bar sales declined by 7.2% with a 5.5% 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 5% increase in off-sales, continuing the structural shift in the drinks trade towards consumers purchasing alcohol for consumption in the home. The majority of these were generated through large retail multiples, meaning that the independent off-trade represents a diminishing share of sales.
Due to the decline in bar volumes and the increase in consumption at home, off sales now account for almost 60% of all alcohol consumed in Ireland.
As a result of these figures, the overall alcohol market increased marginally by 0.17% in 2011. 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 Drinks Industry Group of Ireland 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 with consumer expenditure declining.
The Chairman of DIGI, 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% 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% 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.'