Irish Spirits exports decline by 9% amid global economic challenges
The annual Spirits Report by Drinks Ireland | Spirits reveals that despite the downturn, industry leaders remain optimistic about long-term growth with the right support
Print12 August 2024
Drinks Ireland | Spirits today published its annual Spirits Report. The figures published show the total export value of the sector was €1.3 billion, which represented a 9% decline on the previous year.
This decline is attributed to a highly competitive global market and tough economic headwinds which have complicated the market for drinks categories worldwide.
The long-term trajectory of the sector remains growth-oriented, but government support and a fair and balanced regulatory environment will be crucial moving forward.
Strong export growth has been achieved by Irish Spirits (Irish Whiskey, Gin, Irish Cream and Poitín) within the last decade, which has delivered significant economic contribution, created jobs, and indeed increased tourism visits throughout the island of Ireland.
Market conditions
However, since early 2023, key factors that contributed to more challenging export
market conditions include higher inflation levels and cost-of-living, driving higher interest rates, leading to weaker consumer spending.
Domestically, Irish Spirits volume sales were marginally down by 1.4% in 2023, reflecting general trends in alcohol consumption here.
Vodka, followed by Irish Whiskey, Gin, Rum and Irish Creams were the most popular categories at home.
Whiskey exports
Irish Whiskey exported 14.9 million cases in 2023. However, the export value of the category declined by -14% to €875 million, due in large part to the challenging market conditions outlined above.
The overall growth trajectory for this sector remains positive, and this short-term decline should be viewed in the context of 2022 sales of Irish Whiskey leaping by almost €200 million (+25%) versus 2021 to €1 billion in value.
The United States continues to be the key export destination for Irish Whiskey, accounting for more than one in three bottles of total global sales.
Poland has become a significant market, surpassing both Ireland and the United Kingdom to become the second largest, with 16% growth in 2023.
Consequently, and even with an increase of 6.7% in 2023, the United Kingdom dropped to the fourth largest market globally for Irish Whiskey.
Other key findings in the report include:
- Irish Cream saw sales of 9.5 million cases with export value down by 8.7% to €370 million in 2023.
- Cases sales of Irish Poitín rose by 13.5% in 2023, reflecting growing interest domestically and internationally.
- Sales in Ireland of Gin experienced a decline of 6%. However, the premium end of the market, where many Irish producers operate, continues to perform well.
- Vodka sales in Ireland declined in 2023 to end down by 1.2% vs 2022. However, sales of premium Vodkas doubled in share in 2023 compared with 2019.
- Ireland continues to have some of the highest excise rates on alcohol across Europe.
Irish Spirits continue to lead the way in the premiumisation trend, innovating to offer consumers high quality choices and responding to changing consumer trends in alcohol consumption – that those who choose to drink are drinking less, but better.
This trend is reflected in Ireland, where overall per capita consumption has declined 30% in the past two decades.
Challenging periods
“Sustaining businesses during challenging periods so that they continue to deliver to the wider economy in the future requires a supportive enterprise and regulatory environment,” said Aengus King, director, Drinks Ireland | Spirits.
King notes that he depends on government and state agencies to work with them to ensure the best possible market access internationally.
This includes the avoidance of tariff barriers; the protection of their important geographic indication (GI) status for Irish Whiskey, Irish Cream, and Poitín across global markets; and increased investment through state agencies and support for exporters for export promotion and development.
“Despite the current market conditions, I am encouraged that growth is expected to return in the period ahead,” said David Boyd-Armstrong, founder, Rademon Estate Distillery.
Boyd-Armstrong notes that while still robust, Irish Spirits need support and promotion to build on the progress already made, and that this must be underpinned by a fair and balanced regulatory environment.
The Drinks Ireland | Spirits report is available here.
Read more: Drinks Ireland | Spirits launches campaign to protect Irish cream liqueur
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