What's the Craic With Irish Spirits
The Economic Situation of Whisky
Drinks Ireland, the body representing beverage brands and entrepreneurs in the Republic of Ireland, recently launched its fifth annual spirits industry and market report. As expected, the enforced closure of the Covid-19 pandemic in 2020 has had a significant impact on the Irish spirits beverage industry, both domestically and globally.
Irish spirits exports fell by 16% last year after several years of strong growth.
Domestic sales declined by 4.8% in 2020.
Strong growth in the "ready-to-drink" (RTD) category in Ireland in 2020, as domestic sales of Irish cream liqueurs rebounded due to a shift to off-trade
Despite a decline in sales and exports last year, Ireland's spirits industry is now setting its sights on recovery. A key channel for Irish spirits will be Global Travel Retail (GTR), as it was the second largest retail channel for Irish whiskey before the pandemic and the fourth largest for Irish cream. To illustrate this in more detail, for Irish whiskey, the GTR channel is responsible for 679,600 9-litre cases (i.e. 12 bottles) in 2019, compared to a much lower figure of 25,900 in 2020.
The re-emergence of the travel drive will greatly help this number increase again as time goes on and travel restrictions around the world decrease.
The report details a slight decline in overall global sales of Irish spirits protected by EU GI (Irish Whiskey, Irish Cream and Portin), from 20.41 million 9-litre cases in 2019 to 19.679 million cases in 2020. The most popular markets for these GI spirits last year were the U.S., U.K., Canada, Germany and Ireland.
The Different Economic Situation of Irish Whiskey
Domestically, the report shows that the closure of hospitality venues has had a negative impact on the industry, particularly for brands that rely heavily on on-site trading. Overall, sales fell by 4.8%, from 2.249 million 9-liter cases in 2019 to 2.309 million 9-liter cases in 2020.
Some spirits categories benefited from the shift to off-trade by Irish consumers, the report said, with sales of Irish cream liqueur up 26.5%. see below for a list of the most popular spirits categories in 2020. Interestingly, as a category, hard sodas did not exist in Ireland in 2019, but in 2020, nearly 90,000 cases of various brands of hard sodas were sold.
Ireland also has the second highest overall excise tax on beverage products in Europe in 2021, as well as the third highest tax rate on spirits. Nearly 180,000 people rely on this industry for employment, and Ireland imposes a huge tax burden on beverage producers. Irish beverage companies are calling on the Irish government to reduce excise duty by 7.5 percent in the 2022 budget, which they believe will boost tourism in the post-Covidien era and ensure sustainable long-term growth for Ireland's beverage and hospitality industries in 2022 and beyond.
Analysis of the Founder of the Famous Irish Whiskey
Bryan Fallon, managing director of Heaven Hill Ireland, brand owner of Carolan's Irish Cream Liqueur and Irish Mist Honey Liqueur, and chairman of Drinks Ireland, said that the reduction in excise duty would ensure the long-term growth of the drinks and hospitality industry in the post-Covidien era and beyond. Irish drinks chairman Bryan Fallon said.
"There are other challenges outside of Covid-19, such as the high taxation of alcohol in Ireland, which is unsustainable and uncompetitive. We call on the government to reduce the excise tax by 7.5% in the 2022 budget. A reduction in excise duty will boost tourism in the post-Covidien era and ensure sustainable long-term growth for Ireland's drinks and hospitality sectors in 2022 and beyond.
"While 2020 has shown that our industry is resilient and adaptable, that resilience and adaptability will be tested in the post-Covidien era and the government must support the recovery of our industry by cutting excise duty."
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