Guinness sales down as alcohol intake falls

SALES of Guinness and Baileys in Ireland were hit hard by the general downturn in alcohol consumption in its first half-year’s trading, which includes the Christmas period.

Part of the multinational drinks group Diageo, both Guinness and Baileys reported a drop in volume sales of 7% and 17% respectively in the six months to December 31, 2003.

The group has reacted recently by adding 4.5% to the cost of its draught beers, despite growing consumer unease with the cost of alcohol in Ireland.

A Guinness spokesman denied the group was pricing itself out of the market.

Several factors and not just price, were at play in terms of the decline in alcohol sales in Ireland, he said.

Contrary to popular opinion, alcohol consumption is falling. We may still be the third-largest imbiber in Europe, but the figures confirm a decline in overall alcohol intake.

In the six months to end 2003 the overall volume of alcohol consumed in Ireland fell by 4%.

Changing lifestyles and a dip in consumer confidence were blamed by the drinks group, which saw its volume sales fall 6% in the same six-month period.

Whatever the reasons, the Guinness group spokesman questioned the view that more pub licences would solve the problem.

That analysis was too simplistic, he said.

Tánaiste Mary Harney, who previously has called for a more liberal licensing regime along with consumer bodies, is on “dangerous ground,” he said.

He warned: “If we want this pub culture to survive we can’t afford to attack it on the other hand through a more liberal licensing regime.”

Significant price ranges to be found in pubs across Ireland suggests healthy competition in the Irish market, he said.

Critics argue, however, that prices here go from high to very high and scoff at the notion of competition when a bottle of water can cost €2.50 and upwards in a pub.

Guinness in Ireland held well over 50% of the draught beer market at one time. Despite its best efforts it continues to lose out.

Brian Duffy, the group’s Irish boss, said declining pub sales were putting publicans under pressure, especially those who invested heavily in the industry.

This year the group will pump a massive €50 million into supporting the quality of draught beers in the Irish market.