New report illustrates profound impact of Covid-19 on Irish brewers

Beer sales have soared in Ireland amid the unprecedented heatwave
Exports fall due to lockdowns in key markets, with a notable 45% drop in Irish beer exports to the United States

Closure of hospitality sector sees beer sales decline by 17.3% in Ireland, with production down by 13.8%

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13 April 2021 | 0

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The closure of hospitality businesses drastically hit Ireland’s beer sector in 2020, according to a new report released by Drinks Ireland|Beer, which shows that production dropped by 13.8% in 2020.

The ‘Irish Beer Market Report 2020’ details how the value of beer exports declined by 17% in 2020, from €305 million to €254 million.

The marked drop in exports reflects a lower international demand for Irish beer, as most key markets endured lockdowns. The most significant fall was in exports to the United States, down by 45%.

Domestically, the closure of the hospitality sector resulted in a 17.3% fall in total beer sales in 2020 when compared to the previous year.

The report outlines that while beer remains Ireland’s favourite drink, its market share fell from 44.6% in 2019 to 38.9% in 2020.

Typically, just over 60% of beer sales are in Ireland’s pubs, restaurants, and hotels. However, in 2020 just 29.7% of beer sales took place in the hospitality sector.

The lockdown also impacted the type of beer consumers in Ireland chose in 2020. Usually, stout sales make up around 30% of all beer sales, but this fell to 25.3% in 2020. Ale’s beer market share dropped from 6.2% in 2019 to 4.1% in 2020, while lager increased its market share from 63.5% to 69.5%.

This illustrates the type of beers consumers generally prefer to drink in the pub. The most dramatic movement was in ale and stout sales. Normally about 80% of those variants are sold in the on-trade, but just 43% of stout and ales were sold in the hospitality sector last year.

The report also shows that beer drinkers in Ireland continue to pay the second highest excise rate in the EU.

Peter Mosley, managing director of the Porterhouse Brewing Company and chair of Drinks Ireland|Beer explained more about the profound impact of Covid-19.

“Ireland’s beer industry is dynamic, innovative, and makes a valuable contribution to the economy,” Mosley said. “In 2019, prior to Coivid-19, exports were valued at €305m and we have seen a stream of new products coming onto the market from Irish brewers in recent years, including low and non-alcoholic variants.

“But, as a drink that’s mostly popular in our pubs, the sector has been profoundly impacted by Covid-19. And with hospitality businesses remaining closed, the challenges continue for our sector in 2021.

“Coupled with a fall in sales for Irish beer, brewers have also provided extensive financial support to their hospitality customers at a heavy cost, carrying out keg uplifts, and organising for the disposal of unsold and out of date beer in an environmentally friendly manner,” Mosley added.

Jonathan McDade, head of Drinks Ireland|Beer said it is “vitally important” that the sector receives additional supports from government to allow it to endure the extended lockdown.

“We are calling for financial aid to support the coverage of costs associated with the uplift, disposal, and writing-off of out-of-date beer caused by repeated lockdowns,” McDade said. “Furthermore, the sector requires a change in the duty system, allowing for excise to be recovered in a similar manner to VAT on bad debts, which would prove invaluable in us continuing to support the provision of credit to the hospitality sector.”

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