Ireland’s drinks face sober times

Against the backdrop of deep recession and unemployment, Ireland’s per capital alcohol consumption fell by 9.6 percent in 2009 and is now 21 percent below an all-time peak in 2001 when Ireland’s economy was booming.

“It was the worst year for our industry in living memory,” Kieran Tobin, chairman of the Drinks Industry Group of Ireland (DIGI), told a news conference in a central Dublin pub.

Pubs have been closing at the rate of around one a day, he said, and 15,000 jobs had been lost across the sector over the last 18 months.

Last year’s drinking decline follows a 7.7 percent decline in per capital consumption in 2008, while in volume terms consumption declined 8.9 percent in 2009 after a 5.9 percent drop in 2008, the report by Anthony Foley of Dublin City University Business School for DIGI, which represents the on-trade – pubs, hotels, restaurants – and off-licence sector.

“Everything in drinks has two edges,” Foley said when asked about the health benefits of the decline in drinking.

“The average has been reduced, but no-one would argue all the problems have gone away. What ideally you’re looking for is that everybody drinks moderately and the industry sustains itself without any bad press.”

Foley’s report found prospects remained “very weak” for 2010 when the total volume of alcohol consumed could decline by a further five percent.

Last year’s decline was to an extent exaggerated by the combination of a strong euro and comparatively low excise duty on spirits in Northern Ireland.

That drove many over the border to buy their drinks in a shift the industry has estimated costs the Irish government 100 million euros ($135.1m) a year in lost revenue.

Taking Northern Ireland sales into consideration, Foley’s report found the 2009 decline was still seven percent, but the excise gap – of 24.7 percent on spirits – could narrow following the British budget this week.