Irish spirits exports drop 16% in 2020

Exports of spirits from the Republic of Ireland declined by double digits last year, due to the collapse of global travel retail (GTR), a new report has found.

According to the Irish Spirits Market Report 2022 from trade body Drinks Ireland | Spirits, the value of Irish spirits exports fell by 15.97% to €990 million (US$1.15 billion) last year, down from €1.18bn (US$1.37bn) in 2019.

The value of global Irish whiskey sales fell by 4% to 11.4m nine-litre cases last year.

Before the pandemic, global travel retail was the second biggest market for Irish whiskey and the fourth largest for Irish cream liqueurs.

Bryan Fallon, managing director of Heaven Hill Ireland and chair of Drinks Ireland | Spirits, said: “The report shows that the spirits sector did not escape unscathed from the Covid-19 pandemic. Irish hospitality venues are a vital component to the continued growth and prosperity of Ireland’s spirits and craft spirits sector, allowing companies to engage with consumers, so their closure was very much felt.”

Consumption of spirits in the country increased its share by 6.73% to 22.3%, while wine makes up 32.2% and beer represents 32.2%.

Overall spirits sales in Ireland in 2020 fell by 4.8% to 2.3m nine-litre cases.

By spirit category, vodka remained the most popular drink in Ireland with a 31.6% market share, despite declining by 10.2%. It was followed by Irish whiskey (26.3% market share), gin (14.04%), and rum (7.4%).

Between 2014 and 2019, gin sales rocketed by 184%, with the category expected to grow over the next five years after being hit by the ‘Covid-19-related blip’.

Irish cream liqueurs, the seventh most-consumed spirit in 2020, rose by 26.5%, while Scotch increased by 9.9%. The report noted that the two categories benefited from a sales boost in the off-trade, while vodka (down 10.2%) and Tequila (down 30.4%) dropped by double digits as a result of their reliance on the on-trade.

The report highlighted the rise of the ready-to-drink (RTD) sector in Ireland last year, with nearly 90,000 cases sold and a ‘significant’ uplift for spirits-based RTDs. The RTD category didn’t exist in the country in 2019, the report noted.

‘Unsustainable and uncompetitive’

Ireland has the third highest level of excise on spirits in the European Union. As such, Drinks Ireland is calling for a cut on excise tax in the government’s next Budget to help the industry recover.

Fallon added: “Outside of Covid-19, a number of other challenges remain such as Ireland’s high level of tax on alcohol, which is unsustainable and uncompetitive.

“We are calling on the government to reduce excise tax by 7.5% in Budget 2022. An excise reduction would boost post-Covid tourism and secure sustainable, long-term growth for Ireland’s drinks and hospitality businesses in 2022 and beyond.

“While 2020 has shown that our sector is resilient and adaptable, this resilience and adaptability will be tested in the post-Covid world, and the government must support in our sectors recovery through an excise cut.”

Sales of Irish whiskey in the US are expected to overtake Scotch in the next decade, according to a report by Drinks Ireland.