Decline in pub beer sales softening – Heineken Ireland
Beer volumes declined again in Ireland in 2012 by 1.8% on 2011 while the value of the beer market dipped by a similar 1.8% or €400 million to €2.45 billion, according to Heineken Ireland’s Performance Overview for 2012. But the Cork brewery also had some good news for the on-trade as signs also indicate that some stabilization of beer volumes within the overall pub sector appears to have taken place.
Print14 February 2013
Heineken’s Performance Review stated, “2012 saw a shift in the on-trade as decline rates softened driven by the lager category. The rate of decline in the pub sector for 2012 over 2011 at 2.5% was at its lowest in decades. There are encouraging signs that the decline in the pub sector is softening as for the first time in near two decades there has been marginal growth recorded in the on-trade beer sector in the latter half of 2012”.
In contrast, the off-trade experienced a decline for the first time in decades last year.
“Whilst the overall yearly decline on 2011 was around 0.6%, a stronger decline of near 8% was recorded in the last quarter of 2012,” stated the report.
Lager continues to gain share in the beer market at the expense of stout and ale and remains the main beer of choice for the Irish consumer, commanding 65% of the total beer market with stout declining to 30%, according to Heineken Ireland.
On-trade continued to dominate beer sales, accounting for 61% of the beer market here.
Indeed the Cork brewery’s brands stable enjoyed a 53% share of the on-trade lager market by volume.
Revenues at Heineken Ireland remained unchanged at €464 million compared with 2011 but Heineken Ireland continued to extend its lager leadership in the market here with the company claiming that its portfolio of lagers grew significantly, from 37% of the lager market by volume in 2011 to 38% (in a beer market that was down overall by 1.8%) primarily through the Heineken brand.
“The remainder of the Heineken Ireland lager portfolio continues to experience strong share of growth in the marketplace driven primarily by the stellar performance from the Coors Light, Tiger, Desperados and Sol brands,” stated the company.
In 2012, for the first time, both on- and off-trade channels recorded declines in overall beer consumption, reflecting the continued enormous pressure on consumer confidence and disposable income, stated the company.
Severe constraints on credit imposed by the banking sector will certainly make it difficult for the pub sector in 2013, the report predicts, “With foreclosures by banks expected to continue, hitting both pub and off-trade sectors, Heineken Ireland sees no evidence of any serious efforts being made by the banking sector to support the labour-intensive pub sector in this regard”.
Group beer volumes at parent company Heineken NV were up 2.8% organically to 221.2 million hl providing the company with a 3.9% boost in revenues to €18.38 billion from €17.12 billion in 2011.
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