DIGI Report Shows Continued Decline In The On-Trade
Published on Apr 16 2013 4:14 PM in General Industry
The volume of pub sales has fallen by over 32% during the last five years, according to a new report launched today by the Drinks Industry Group of Ireland. The fourth annual Drinks Market Performance Report, compiled by Anthony Foley of DCU Business School, examined the consumption, price, value, product mix, volume and distribution of alcohol sales in bars and off-licences in Ireland and found that market has continued to decline. According to the report, the on-trade saw a continuing sizeable decline, which although partly offset by an increase in off-licence sales still resulted in an overall market volume decline. Off-licence share now makes up approximately 60% of alcohol consumption.
Significantly, the report found that the volume of bar sales declined by a further 6% in 2012, meaning that the total decline over the past five years now lies at 32.7%. This decline has had a major impact on the 'employment-intensive on-trade', with over 6000 jobs lost in the sector since 2009. The huge increase in wine excise has had a particularly negative impact on the restaurant sector, counteracting any benefit from the introduction of a lower tourism VAT rate.
Commenting on the outlook for 2013, report author Anthony Foley said "Unfortunately the early indicators for 2013 bar sales from the Retail Sales Index are disappointing. In January 2013 bar sales volume dropped by 6.9% compared with January 2012 and in February the drop was 3.1% compared with February 2012. The overall market will be hit by the very large increases in excise levels in Budget 2013 and will decline slightly due to reduced average consumption and loss of consumers through emigration. The on-license sector will continue to decline."
Chairman of DIGI and Diageo's European Corporate Relations Director, Peter O'Brien described the figures in the report as 'stark', noting that the Irish pub and independent off-licence sectors 'are in crisis'.
"The impact of that crisis is devastating, not just for business owners, but for their staff and the communities they serve. Bars and independent off-licences - employment-intensive operations - are closing on a daily basis and we have already seen 6000 people lose bar jobs since 2009."
"Small communities are losing valuable meeting places, and the potential negative impact for the tourism sector is huge. The Irish pub remains one of the top draws for foreign visitors, and if the current trend continues the presence of the Irish pub in our tourist offering will be severely diminished."
O'Brien continued, "The Drinks Industru Group of Ireland believes the gravity of the situation calls for a Government action to protect and preserve the Irish pub and the indpendent off-licence sector. But as a first measure, the Government must commit to halting and reversing the cycle of punitive excise and VAT increases."