Sales of alcohol dwindle by 13% in first quarter

ALCOHOL SALES in the Republic plunged by an unprecedented 13 per cent in the first three months of 2009, according to new figures from the Revenue Commissioners.

However, the dramatic decline in sales compared to the same quarter in 2008 is not entirely due to people drinking less alcohol, but is at least partly the result of a surge in cross-Border shopping, according to industry representatives.

Drinks Industry Group of Ireland (DIGI) chairman Kieran Tobin said the figures confirmed the worst fears of the industry that “a major increase in cross-Border shopping and the dire economic situation are exacerbating the trend of falling sales volumes and average consumption levels”.

Mr Tobin said both businesses and jobs were at risk across all sectors of the drinks industry, especially in the Border region. “Little pick-up” in sales is expected during the remaining months of 2009.

The Revenue data shows that the largest decline was in spirits, with volumes plummeting 19.1 per cent.

Beer sales saw the next highest drop, down 12.4 per cent, while cider sales decreased by 12 per cent. The sale of wine was down 10.6 per cent.

“These are enormous and unprecedented rates of decrease,” said Mr Tobin, who is communications and corporate affairs director of Pernod Ricard.

“Given the continuing attractiveness of cross-Border shopping and the scale of this decline, Republic of Ireland consumers are undoubtedly continuing to source some of their alcohol products from over the Border.”

A weak sterling has combined with the UK’s lower rates of VAT and excise duty to widen the gap in alcohol prices between the Republic and Northern Ireland.

Mr Tobin welcomed the Government’s decision not to further increase excise rates in last month’s supplementary budget, but he added that, given the scale of the decline in overall retail sales, including alcohol, the Government should now consider reducing excise and VAT rates.

The report of the Commission on Taxation, due later this year, should take account of the effect of the Republic’s high alcohol taxation rate on tourism, Mr Tobin said.

The drinks industry group warned in March that about 10,000 jobs would be lost from the €7 billion drinks industry in 2009.