Shop until you drop … alas across the border
The on-trade sector (pubs, restaurants) has been affected most by the decline in beer consumption. Publicans blame it on the ban on smoking which was introduced in Ireland in 2004. According to a survey by the Irish Department of Health, published in 2007, one in three adults smokes.
Over the years, Ireland’s consumers have developed a significant preference for lager. Lager commands a 61 percent share of the Irish beer market, with stout’s share arresting previous rates of decline and holding at 33 percent.
The total beer market in Ireland now stands at EUR 3.18 billion. The on-trade sector still dominates, accounting for 68 percent of the overall sector.
In contrast, the off-trade experienced a decline for the first time this decade, with volume sales dropping 4.1 percent, year on year, it was reported.
Lager accounts for 48 percent of the on-trade beer market while stout is responsible for 44 percent.
Lager is strongest in the off-trade with 88 percent of beer sales, while stout accounts for 10 percent.
The Irish, apparently, are picking up the taste for lager beers, although this swing in consumer preference may be caused to some extent by an acute low in people’s wallets.
Go north
Shopping in Northern Ireland for cheaper products is one solution to people’s economic worries. The other one is to buy contraband.
A desperate financial situation has forced the Irish government to go ahead with a supplementary budget in April 2009, only six months after the 2009 budget in October, which itself was brought forward to deal with the worsening performance of the economy.
The "old reliables" of petrol and alcohol have not been targeted by Ireland’s Minister for Finance but cigarettes and diesel have been hit with increases.
VAT was brought up to 21.5 percent.
The Minister for Finance reportedly said that there was no scope to raise excise duty on alcohol this time as further tax increases would create a “substantial risk” driving consumers across the border.
Meanwhile, anti-alcohol lobbyists complain that the decision not to increase excise duty on alcohol was a lost opportunity to yield revenue for vital health and social services, as well as reducing the harms caused by alcohol abuse.
In the past 15 years, they argue, there have only been three increases in excise duty – cider (2001), spirits (2002) and wine (October 2008). The last excise duty increase on beer was in 1994. Take beer for example: tax as a percentage of price fell from 37 percent in 1994 to around 29 percent in 2007.
As concerns tobacco, the Irish Government backed away from a EUR 2 hike in the cost of a packet of cigarettes because it would have led to a massive increase in smuggling and a loss of revenue potentially climbing from a current loss of EUR 500 million to EUR 1 billion a year, it is understood.
The excise duty on a packet of cigarettes went up by EUR 0.25 cent instead. Even before the hike on excise, a packet of cigarettes cost at least EUR 8.50.
The tobacco industry estimates, and the figures have not been challenged, that 20 percent of all cigarettes smoked in Ireland are smuggled. Latest trends show that counterfeits of popular brands, manufactured illicitly in China, are flowing into the country by the container load.
