Ireland’s beer sector significantly impacted by Covid-19 because of continued on-trade closure

Friday, 7 August 2020

Ireland’s beer sector significantly impacted by Covid-19 because of continued on-trade closure

 
Drinks Ireland|Beer calls for urgent Government support for Ireland’s pub sector as it publishes annual Beer Market Report
 
New report shows that beer sales and production declined in 2019, just prior to the Covid-19 outbreak
 
Urgent Government support is required for Irish pubs following this week’s announcement that they will not reopen until September at the earliest. With 62.7% of beer sold in the on-trade sector, the Covid-19 crisis has significantly impacted the brewing sector’s contribution to the economy. In the decade leading up to the Covid-19 crisis, over €3.84 billion was paid to the exchequer in excise receipts alone.
 
According to Drinks Ireland|Beer, brewers have supported pubs during the Covid-19 crisis, with a massive keg uplift to collect out of date beer, and the cleaning of beer lines ahead of the planned full reopening of the sector, which has again been pushed out. It now says that there is an urgent need for dedicated Government support.
 
To mark International Beer Day today (August 7th), Drinks Ireland|Beer, the Ibec-affiliated group that represents beer producers and distributers in Ireland, has released its annual Beer Market Report which updates on the performance of the sector in 2019, just prior to the Covid crisis.  The trade body has also said that provisional figures for 2020 show that Ireland’s beer sector has been heavily impacted by Covid-19. 
 
The new report shows that total beer consumption fell by 2% last year, with per capita beer consumption down by 2.9%.  New provisional Revenue clearance data released last week shows that beer sales fell by 17.4% in April, May and June 2020 (Q2), compared to the same period last year.
 
According to the new Revenue figures, beer was the most heavily impacted drinks sector from Covid-19 in terms of sales. This is due to the closure of the on-trade, where the majority of beer produced in Ireland is consumed. In 2019, 62.7% of all beer sales were in the on-trade and 37.3% were in the off-trade.  Furthermore, 80% of stout sales, 78% of ale sales and 53% of lager sales were recorded in the on-trade sector.
 
Overall, total production was down marginally between 2018 and 2019 by 1%. Drinks Ireland|Beer has said that in 2020, production will be down much more significantly across the sector as a result of Covid-19.
 
The new report also found that beer exports increased in 2019 by 8.5%, reaching €305 million. The top five export markets for Irish beer last year were the United Kingdom, France, the USA, Germany and Canada.
 
Direct employment among Drinks Ireland|Beer members was up marginally last year by 4%, from 1,103 people to 1,147 people.
 
Drinks Ireland|Beer’s report also confirms that beer is Ireland favourite drink, with a 44.6% market share in 2019. Lager is Ireland’s most popular beer (63.5%), followed by stout (29.3%), ale (6.2%) and non-alcoholic beer (1.0%). There was an increase in non-alcoholic beer sales between 2018 and 2019.
 
The sector is also under pressure a result of beer excise, which is the second highest in Europe after Finland. Last year, the sector’s excise contribution to the Government was €421 million and over the past decade, it has contributed €3.84 billion to the exchequer.  Drinks Ireland|Beer has called for alcohol excise to be decreased in this year’s Budget, to help support the sector, particularly at this challenging time.
 
Jonathan McDade, Director of Drinks Ireland|Beer said:
 
“The Government needs to set up a taskforce that is aimed at providing financial support for pubs that remain closed due to the Covid-19 crisis. With almost 50% of pubs remaining closed, a strong joined up Government support package is a priority, to avoid mass closures. 
 
“Prior to the Covid crisis, 2019 was a challenging year for the sector with a decline in total beer sales and production.  As a result of the Covid-19 crisis and subsequent lockdown measures, the brewing sector faces an uncertain future due to its reliance on a vibrant and active hospitality sector. If there is no significant Government intervention, many outlets will not be in a position to reopen come September.
 
“Despite these challenging times, Ireland continues to love beer and it remains the nation’s favourite drink. In recent years and prior to Covid-19 we saw significant innovation in the sector, resulting in more choice than ever for Irish consumers and an increase in the popularity of non-alcoholic beer. The sector continued to make an important contribution to the economy in 2019, with €421 million in excise receipts and €305 million worth of beer exports.”