High prices blamed for 11.5% fall in beer sales

High prices are driving consumers to drink less beer, the latest figures show.

Sales of draught beer and cider sunk by 11.5 per cent in the first four months of the year according to the Irish Brewers' Association.

Responding to the news, Vintners' Federation of Ireland (VFI) president Séamus O'Donoghue acknowledged that high prices were affecting sales. He said that the federation had been asking brewers to hold off on price increases.

Last week, the Republic's biggest brewer, Diageo-owned Guinness, announced that it was increasing its prices by 4 cent.

Diageo produces popular brands such as Guinness, Budweiser and Carlsberg. The company blamed rising costs for the price increase.

With the addition of VAT and the possibility that publicans could add their own price hikes, consumer groups said they feared the overall price could go up by as much as 10 cent.

News of the fall in consumption prompted one brewery to put its prices on ice for the next year.

Cork-based Beamish and Crawford announced a price freeze on its brands, that include Beamish Stout, Miller, Fosters and Kronenbourg, until 2006.

The company's managing director, Alf Smiddy, who is also chairman of the brewers' association, said the producer was freezing its prices in the hope that its customers, the pubs, would also hold off on their increases.

He said yesterday that high prices were a "huge factor" in the reduced beer sales. "Consumers today are much more conscious of value," he said. "We've taken a stand and consumers have responded very well."

Mr Smiddy added that his competitors' decision to increase prices against a background of falling sales flew in the face of basic economic sense.

Figures released by the Drinks Industry Group of Ireland (DIGI) earlier this week show that beer's overall share of the market fell by 0.9 per cent last year. At the same time, alcohol consumption per head dropped by about 3 per cent in 2004.

The figures, drawn from the Revenue Commissioners and the Central Statistics Office (CSO) also indicated signs of a lifestyle change, showing greater off-licence sales and increased wine consumption.