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Bar sales down 6 per cent as consumption of alcohol falls

A new report from the Drinks Industry Group of Ireland shows that the overall drinks market and alcohol consumption were “essentially static” due to the recession and changing consumption patterns.

Image: Sasko Lazarov/Photocall Ireland

BAR SALES ARE down, adult consumption of alcohol has also fallen, and the prospects for the hospitality sector “remain weak”, according to a new drinks industry report.

Drinks Market Performance 2011, a report released by the Drinks Industry Group of Ireland (DIGI), was put together by Anthony Foley of DCU Business School. It shows that the overall drinks market and alcohol consumption levels in Ireland were “essentially static” last year due to the recession and changing consumption patterns.

In 2011, the total value of bar sales declined by 7.2 per cent, with a 5.5 per cent fall in sales volumes, the report showed.

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 per cent increase in off-sales, the majority of which were generated through large retail multiples. Off sales now account for almost 60 per cent of all alcohol consumed in Ireland. DIGI said that this continues the shift towards consumers purchasing alcohol to drink at home – and showed that independent retailers were experiencing a diminishing share of sales.

The overall alcohol market increased marginally by 0.17 per cent in 2011, but with the increase in adult population average consumption levels decreased to 11.7 litres of alcohol. DIGIT said this is a level last seen in the mid-1990s.

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 with consumer expenditure declining.

Chairman of DIGI, Kieran Tobin, said:

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 to stabilise the market”, said the report, adding that the  reduction in VAT on tourism-related activities also had a tangible positive impact on the hospitality sector and on reducing prices.

The report concluded that while Irish drinks exports continue to perform strongly on international markets, “this success is founded on a solid domestic base”.

DIGI said it looks 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.

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