Drinks industry indicates sales flat as consumption declines

ALCOHOL SALES in Ireland were broadly flat last year as average adult consumption continued to fall.

A report from the Drinks Industry Group of Ireland (Digi) shows the overall market for alcohol grew by 0.14 per cent in 2011. The report estimates expenditure in 2011 at €6.0914 billion.

Within that, the volume of sales in pubs, which includes the sale of food and soft drinks, fell by 5.5 per cent in 2011, while the value declined by 7.2 per cent.

There was better news from the off-trade, where volumes advanced by 5 per cent although prices fell, indicating strong competition among retailers.

This continues the structural shift of recent years in the drinks trade towards shoppers purchasing alcohol for consumption at home.

Off-trade sales now account for almost 60 per cent of all alcohol consumed in Ireland, although it accounts for just 30 per cent of the value of the market, highlighting the pricing differential with pubs.

Overall, average adult consumption fell by 0.14 per cent to 11.7 litres a year. This is back to levels of the mid 1990s.

Of the four alcohol drinks categories, beer and cider had volume declines and spirits and wine had increases.

The cider decline was 0.5 per cent, while beer was down 1.9 per cent. Wine increased by 2.1 per cent and spirits by 3.2 per cent.

The individual product market volume shares in 2011 were wine 26.4 per cent, beer 46.7 per cent, spirits 19.1 per cent, and cider 7.8 per cent.

Alcohol prices declined by 0.8 per cent in 2011 compared with 2010.

Off-licence prices dropped by 2 per cent while on-trade prices reduced by 0.3 per cent.

Digi said the prospects for the drinks market in general and the wider hospitality sector “remain weak”, as a result of low levels of economic growth and with consumer expenditure declining.

“The situation remains fragile with pubs, bars, nightclubs, hotels, restaurants and independent off-licences continuing to close as a result of consumers not spending,” Digi chairman Kieran Tobin said.

Mr Tobin said the on-trade in Ireland is operating at only 70 per cent of its 2007 level.

The report states the early indicators for 2012 for bar sales from the retail sales index were “very disappointing”.

In January bar sales volume dropped by 8.5 per cent compared with January 2010 and in February the decline was 9.9 per cent compared with February 2010.

“Overall, the alcohol market will decline slightly due to reduced average consumption and loss of consumers through emigration,” the report concludes.