Alcohol consumption down 5.9% in 2008

The downturn in the economy and a sharp increase in cross-border sales made 2008 the worst-performing year for the drinks sector in a quarter of a century, the Drinks Industry Group of Ireland (Digi) said today.

The group warned that jobs and revenue will be lost if the Government increases alcohol taxes in next week's supplementary Budget.

It said falling sales could see 9,000 jobs shed from pubs and off-licences this year.

The drinks market performance in 2008 deteriorated as the year progressed, with performance in the second half of the year far worse than in the first six months. The volume of alcohol consumption declined by 5.9 percent in 2008 compared to an increase of 2.5 per cent in the preceding year.

“Per adult consumption decreased by 7.3 per cent in 2008, while per capita consumption went down by 7.7 per cent. These rates are equal to the decline in consumption that was recorded in the entire seven year period between 2001-2007. As a result average consumption levels are back to 1997/98 levels.

According to Digi, 1500 pubs in Ireland have closed during the last six years, while the number of people employed in the drinks sector has fallen by 20,000 in just two years. It warned that a further 9,000 jobs could be lost this year.

Speaking at the publication of the groups' Drinks Market Performance 2008 study, which has been compiled by DCU economist Anthony Foley, the chairman of Digi Kieran Tobin said that if current trends continue, 2009 will be even worse with 10 per cent of off-licenses sales migrating to Northern Ireland and the loss to the State of over €100 million in tax revenues. He also warned that up to 10 per cent of people employed in the drinks industry risk losing their jobs.

"This will come on top of those losses that have already been sustained in the past year, meaning that the numbers employed in the sector will have fallen from 100,000 to approximately 80,000 in just over two years," said Mr Tobin.

"Increasing taxes will exacerbate this situation, and will also encourage more cross-border shopping with further loss of revenue for the industry and the State.

All four alcohol drinks categories suffered volume declines with cider down 11 per cent, spirits down 7.7 per cent, beer down 5 per cent and wine down 4.1 per cent. As a result, the value of the alcohol market overall fell by 2.5 per cent to €6.9 billion last year.

“The clear conclusion from this report is that all sectors of our industry – manufacturers, distributors and retailers both in the on- and off-trade – are under immense pressure and we call on the Government not to add to this burden by considering any increases in alcohol taxes," said Mr Tobin.