Wednesday, 13 January 2021
Drinks exports down 19% in 2020,
due to US tariffs and Brexit stockpiling and impact of Covid-19
Irish drinks sector sets sights on recovery this year
13th January 2021- A new report by Bord Bia today, Export Performance and Prospects 2020/21, confirmed that US tariffs and Brexit stockpiling, along with closures and restrictions on hospitality outlets globally due to the Covid-19 pandemic, negatively impacted drinks exports last year, which fell by 19% to €1.3 billion. Drinks Ireland said that in addition to exports, Covid-19 also significantly impacted production and domestic sales in 2020.
According to the Bord Bia report, however, the value of alcohol exports last year remained 12% higher than they were pre-Brexit in 2016, highlighting the growth the industry has undergone in recent years and its strength on the global stage.
Additionally, it notes that declines in exports do not necessarily reflect a decline in sales, as a significant volume of Irish spirits was in place in the US market at the start of 2020, for example, in the context of ongoing US-EU tariff disputes, which have threatened the extension of tariffs on spirits in both directions.
Patricia Callan, Director of Drinks Ireland said:
“Ireland’s drinks industry is dynamic, innovative, and has performed strongly in domestic and export markets in recent years. While 2021 will continue to be challenging for the sector, as it seeks to recover from the impact of the pandemic and navigates the challenges of Brexit, US tariffs and a range of other issues, it is resilient, and we are confident that it can regain some growth. We saw that despite exports declining last year, for example, they remained at pre-2016 levels. Recovery is dependent on a number of factors and supports from Government, including the full sustained reopening of the hospitality sector, a rebound in international tourism for visitor centres, and supports for Irish drinks exports.”
In response to the Bord Bia report, Drinks Ireland has today released its industry outlook for 2021, stating that drinks producers will be focused on driving recovery this year.
Here is Drinks Ireland’s outlook for the sector:
- 1. 2019 will be the ‘benchmark’ for the drinks industry
- 2. Recovery in the domestic market will require the full hospitality sector to be reopened
- 3. Regaining growth in export markets will be vital
- 4. Alcohol consumption will continue to decline in Ireland
While the sector will aim to recover from the impact of Covid-19 this year, it anticipates that the long-term trend of consumption declining, and consumers choosing “quality over quantity” will continue. Since 2001, the average per adult alcohol consumption has fallen by 23.2% in Ireland according to CSO and Revenue Data.
- 5. A restart of international tourism will support visitor centres
- 6. Meeting the demands of a changing drinks consumer
- ∑ In the beer sector, low and non-alcoholic options are becoming more popular, and non-alcoholic beer now accounts for 1% of Ireland’s beer market.
∑ There is a growing demand for high-quality spirits products like Irish gin and Irish whiskey, with domestic sales of spirits growing by 0.7%, from 2.4 million to 2.42 million nine-litre cases, between 2018 and 2019.
∑ Hard seltzers will grow significantly from being a new market entrant last year, with many new brands set to land on the shelves in 2021.
∑ The Irish cider industry has innovated significantly in recent years, which has reinvigorated the market and resulted in more choice than ever for Irish cider consumers.
∑ In terms of wine, sales of rosť grew in 2019, and the summer favourite now accounts for just under 6% of all wine consumed here, up from 3% in 2019.
- 7. Drinks industry to continue driving forward sustainability agenda
- 8. Growth of Irish whiskey industry will drive more rural development and inner-city regeneration
Many of Ireland’s whiskey distilleries in provincial towns have moved into vacant industrial premises, replacing the enterprises that had previously operated there, as well as lost jobs. This trend looks set to continue, with more developments planned. Similarly, in less rural settings the development of distilleries in Dublin has played a pivotal role in kick-starting the urban regeneration of areas in the city.
- 9. E-Commerce set to grow as a route to market
- 10. Other challenges ahead, including Brexit & US Tariffs