The bad luck of the Irish
By the time the recession ended earlier this year, GDP was 15 percent below its peak, unemployment had reached 13 percent and the cost of rescuing Ireland’s banks had soared beyond initial estimates.
When the trade body Drinks Industry Group of Ireland (DIGI) released its annual update for 2009, it revealed that around 15,000 jobs had evaporated in the industry between 2008 and 2009 and more cuts are likely in 2010.
Weak consumer spending, lost trade to Northern Ireland and fewer visiting tourists have seen per capita alcohol consumption in the Republic of Ireland slip back to the levels of the mid-1990s. Drinks volume sales fell by 9 percent in 2009, following a 6 percent drop in 2008. It is now 21 percent below an all-time peak in 2001 when Ireland’s economy was booming. Nevertheless at 13.7 litres, Ireland has the highest level of alcohol consumption per person aged 15 or over in Europe.
In the past years, pubs have been closing at the rate of around one a day. There are only 8,300 pubs left (according to Government data). Compared with other European markets that still gives the Irish (4.3 million) a fair number of pubs to visit. But on-premise consumption has declined to 48 percent of total volume sales, down from 70 percent in 2001, which is a real worry. Supermarket beer sales and profits pale next to the margins reaped in the pub-sector.
Recent market figures from DIGI show that the on-premise sector is experiencing effective meltdown, suffering a 14.1 percent decline in the first seven months of 2010. Beer consumption has already declined to 110 litres per capita (2009) from 139 litres in 2003, says Canadean, a market research company.
However, DIGI also said that the Government’s excise reduction announced as part of Budget 2010 has had the desired effect of stemming cross-border alcohol purchasing, with a 6.4 percent increase in sales recorded in the first six months of 2010.
Accordingly, DIGI says it will work with the Government to identify further stimulus measures in this December’s budget to boost the employment-intensive hospitality industry in order to prevent closures and save jobs.
There were 100,000 people employed in the drinks industry in 2008, spread between factories, pubs, hotels and off-licenses.
