Irish spirits sector sets benchmark for growth
Global Irish whiskey sales grew by 10.9% in 2019, according to a new report from Drinks Ireland, which said the year will be seen as a “benchmark” for the industry to return to after the pandemic.
Trade association Drinks Ireland/Spirits released its annual Irish Spirits Markets Report 2019 today, which provides data on how Ireland’s spirits sector performed last year. The report’s data predates the Covid-19 crisis, which will have a “significant impact” on the sector, Drinks Ireland said.
In the context of the current climate, Drinks Ireland said 2019 will be a target year for the industry to return to in the future as it seeks to recover from the pandemic.
According to the report, global Irish whiskey sales rose by 10.9% to 11.93 million nine-litre cases last year, up from 10.58m on the previous year. The sector has previously set a goal of 12m cases by 2020. Irish cream liqueur sales grew by 3.9% to 8.52m nine-litre cases, up from 8.2m in 2018.
Total spirits sales in Ireland grew 0.7% to 2.4m nine-litre cases in 2019.
The most consumed spirit in Ireland was vodka, boosted in part by cocktails, followed by Irish whiskey and gin. Drinks Ireland noted that while growth of Irish whiskey and gin slowed in 2019 compared to the previous year, both still rose significantly. Irish whiskey was up by 1.5% while gin rose by 4.6%. Vodka sales grew by 0.6%. Tequila, coming from a low base, showed the greatest percentage increase – up 6.2% in 2019.
Drinks Ireland said the growth across spirits in 2019 has been reversed due to Covid-19. The trade group noted the importance of a “strong domestic Irish hospitality sector” to allow the industry to return to the level of growth seen last year.
The largest export markets for Irish whiskey, cream liqueurs and poitín in 2019 were the US, the UK and global travel retail. Drinks Ireland said travel retail is “under severe pressure as a result of the global collapse in international travel”.
Pat Rigney, chair of Drinks Ireland/Spirits, and managing director and founder of The Shed Distillery, said: “In 2019, we see that Ireland had a dynamic spirits industry, with domestic sales and exports continuing to grow. This growth allowed the sector to support the domestic economy and jobs across Ireland, including in more rural locations where many of our distilleries are located.
“While the sector remains vibrant and innovative, it has been severely impacted by Covid-19. For example, the hospitality sector is vital for consumers to explore products from new and emerging Irish spirits producers. This is on top of other challenges associated with Brexit and the EU and US trade disputes. As an industry, 2019 will be a benchmark to which we will aim to return to in the coming years.”
Drinks Ireland also noted several other challenges to the spirits sector including ongoing trade disputes between the US and EU, which led to a 25% tariff on Irish liqueurs and single malt Irish whiskey from Northern Ireland. In addition, the sector must also deal with uncertainties in the context of a potential no-deal Brexit.
The trade body has also reiterated its call for a 15% cut on alcohol excise in the Budget 2021 to help the sector recover and minimise the risk of job losses.
Vincent McGovern, head of Drinks Ireland/Spirits said: “The Irish government can support the indigenous spirits sector in a number of ways as it seeks to recover from Covid-19. Ireland’s excise taxes are the second highest in Europe and will act as a barrier to recovery.”
McGovern also called for immediate help from the government to help the hospitality sector reopen safely and sustainably.
He added: “Venues, including pubs and restaurants, are regulated environments and should be allowed to reopen and remain open in line with other EU countries. They are hugely important for our spirits sector, including for new and emerging producers who need the opportunity to get their product in front of consumers.”