Drinks Ireland, the body representing the Republic of Ireland’s drinks brands and entrepreneurs, has recently launched its 5th annual spirits industry and market report. As expected, the Covid-19 pandemic enforced shutdown had a significant impact in 2020 on the drinks industry both domestically and globally for Irish Spirits.
- Irish spirits exports down 16% last year, after several years of strong growth
- Domestic sales declined by 4.8% in 2020
- The ‘Ready to drink’ (RTD) category in Ireland grew strongly in 2020, as Irish cream liqueur saw a domestic bounce in sales due to shift to off-trade
2020 has shown that our sector is resilient and adaptable. Bryan Fallon, Chair – Drinks Ireland/ Spirits
Despite sales and exports declining last year, Ireland’s spirits sector is now setting its sights on recovery. One important channel for Irish Spirits will be Global Travel Retail (GTR), as prior to the pandemic it was the 2nd largest retail channel for Irish Whiskey and 4th largest for Irish Cream. To illustrate this in more detail, for Irish Whiskey, the GTR channel was responsible for 679,600 nine litre cases (i.e. 12 bottles) in 2019 compared to a much lower figure of 25,900 in 2020.
The re-emergence of travel driven by tourism will massively help this to increase again as travel restrictions are lowered around the world over time.
The report details that the overall global sales volume of Ireland’s spirits that are protected by EU Geographical Indications (Irish Whiskey, Irish Cream and Poitín) declined slightly, from 20.41 million 9-litre cases in 2019 to 19.67 million 9-litre cases in 2020. The most popular markets for these GI spirits last year were the United States, United Kingdom, Canada, Germany, and Ireland respectively.
Domestically, the report shows the closure of hospitality venues had a negative impact on the sector, particularly for brands that rely heavily on the on-trade. Overall, sales fell by 4.8%, from 2.42 million 9-litre cases in 2019 to 2.3 9-litre million cases in 2020.
Some spirits categories benefited from the consumer shift to the off-trade in Ireland, according to the report, with Irish Cream Liqueur sales growing by 26.5%. The list of most popular spirits categories in 2020 can be seen below. Interestingly, as a category hard seltzers did not exist in Ireland in 2019, but in 2020 nearly 90 thousand cases of various brands were sold.
In 2021 Ireland has also the second highest overall excise tax on drinks products in Europe, as well as the third highest rate on spirits. Almost 180,000 people depend on this industry for employment and Ireland levies a huge tax burden on the drinks producing businesses. Drinks Ireland is calling on the Irish government to reduce excise tax by 7.5% in Budget 2022 and they argue that this would boost post-Covid tourism and secure sustainable, long-term growth for Ireland’s drinks and hospitality businesses in 2022 and beyond.
Bryan Fallon, Managing Director of Heaven Hill Ireland, brand owner of Carolan’s Irish Cream Liqueur and Irish Mist Honey Liqueur, and Chair of Drinks Ireland|Spirits said:
“Outside of Covid-19, a number of other challenges remain such as Ireland’s high level of tax on alcohol, which is unsustainable and uncompetitive. We are calling on the government to reduce excise tax by 7.5% in Budget 2022. An excise reduction would boost post-Covid tourism and secure sustainable, long-term growth for Ireland’s drinks and hospitality businesses in 2022 and beyond.
“While 2020 has shown that our sector is resilient and adaptable, this resilience and adaptability will be tested in the post-Covid world, and Government must support in our sectors recovery through an excise cut.”
For the full Drinks Ireland report – click here: Drinks Ireland Spirits report.
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