Wednesday, 29 April 2020
• Ibec group Drinks Ireland releases seven-point plan to safeguard sector
• Government must work with all affected industries in developing a joined-up Roadmap for reopening of the vital hospitality sector, which employs 175,000
The Covid-19 pandemic has severely impacted Ireland’s drinks industry, with the closure of the on-trade and restrictions in supply to many off-trade channels, not just here in Ireland, but across our global markets, imposing commercial pressure on producers, and in some cases threatening their viability. In addition, the closure of brewery and distillery visitor centres, which usually attract 3mn, mainly overseas visitors, has severely impacted jobs and revenue, according to Drinks Ireland, the Ibec Group, which represents drinks manufacturers, brand owners and distributors on the island of Ireland.
The drinks industry supports over 90,000 jobs in Ireland. In 2019, it attracted 3 million people to visitor centres and delivered exports worth €1.45 billion.
Drinks Ireland has today released a seven-point policy priority plan to safeguard the industry as it weather’s the Covid-19 crisis, to ensure it is well positioned to continue delivering for Ireland’s economy.
1. Allowing drinks producers to continue manufacturing
- Drinks Ireland says that producers should be allowed to continue to operate, as is currently the case, in accordance with relevant protocols. While Irish drinks exports have declined during the Covid-19 crisis, the industry should be well-positioned to bounce-back and return to full export value in a very short period, to the benefit of the Irish economy, if it is allowed to continue operating in a scaled-back manner.
2. Supporting exports by putting boots on the ground
- Supporting brands to recover and regain market position and share should be a key priority for Government. Irish drinks exporters should be supported in rebooting brand marketing and activation in key markets. Central to this should be an ambitious programme of support - of up to 70% - to allow companies to directly and exclusively employ graduate brand ambassadors in key markets for at least 12 months.
3. Roadmap for the reopening of the hospitality sector
- The “how-to” of reopening both the hospitality and tourism sectors is far from clear and Drinks Ireland is urging policy makers to establish a sectoral working group, including representatives from Drinks Ireland and all parts of the hospitality sector to jointly agree a coherent Roadmap for the reopening of the hospitality sector. Drinks Ireland members trade in over 140 markets globally so are uniquely placed to input their knowledge and expertise of what has worked and what hasn’t across the globe.
4. Supporting domestic tourism when visitor centres re-open
- Irish drinks visitor attractions are highly dependent on international tourists, who account for 88% of visitors. Drinks Ireland projects a loss of 70-80% of visitors to these attractions in 2020, with further significant declines expected in 2021 depending on the length of time it takes for international travel and tourism to recover. It said that proactive support and promotion will be required to drive domestic tourism when these attractions do re-open.
5. Urgent cashflow supports including VAT and excise deferral
- Drinks Ireland has called for swift action to assist businesses with their cashflow, including the deferral of all further excise and VAT payments until the crisis has passed, the cancellation of the commercial rate charge for the period of the pandemic and a guarantee that the current wage subsidy will not be subject to a tax review by the Revenue at the end of the year.
6. Allow for direct online selling to support the craft sector
- With pubs, restaurants and hotels closed, industry estimates that alcohol sales are down 30% overall, and many craft producers do not have good off-trade reach in the domestic market. Drinks Ireland says that allowing them to sell directly online to the Irish consumer, without minimum volume requirements, would support the sector. It would also align Ireland with the majority of other European countries.
7. Delivering mutual tariff relief
- Drinks Ireland calls on the Irish Government to actively propose that the EU seek to expedite a reciprocal agreement with the US on the elimination of all tariffs applied as a result of recent disputes, as part of a mutually beneficial stimulus response to the Covid-19 economic crisis. The US has imposed a 25% tariff on a range of EU imports, including Irish cream liqueurs and other Irish liqueurs.
Patricia Callan, Director of Drinks Ireland said:
“The drinks industry, like many other sectors in Ireland’s economy, has been severely impacted by Covid-19. From the on-trade closing, to exports slowing and visitor centres closing, revenue streams are under severe pressure and it is vital that a range of supports and measures are put in place to support jobs and to allow the sector to continue delivering for the Irish economy.
“The sector is comprised of many small and craft producers, supporting local economies in towns and villages around Ireland, but also large businesses that deliver huge exports and exchequer returns for the country, and who have valuable expertise from operations in export markets to help support the safe re-opening of the hospitality sector here.
“Our industry remains committed to support the national effort to respond to the Covid-19 crisis, which it is doing in many different ways, including through producing sanitising products and making donations to support unemployed bar workers and charities working with more vulnerable groups in our society.”