The outlook for the whiskey industry is “extremely concerning” due to the high excise duties levied against it which must be cut to ensure the sector’s future, it has been warned.
Unlike the global market for sales of the spirit, the domestic market is continuing to suffer with a sales decline of 3.2% across the entire spirits industry here in the first six months of the year, according to Irish Distillers.
The Pernod Ricard subsidiary, which has responsibility for the Jameson brand, issued the warning as its parent company reported first-half sales above €8.5bn in the opening six months of the year with international Jameson sales behind much of the growth.
“As one of Ireland’s thriving exports, Jameson is playing a key role in the export- led recovery of the Irish economy.
"However, in stark contrast to this growth and optimism for our export markets, the outlook for the industry here in Ireland is extremely concerning,” said Irish Distillers chief executive Anna Malmhake.
“The penal excise increases on alcohol accumulated since 2013 endanger the export success of indigenous products such as Irish whiskey as well as the 92,000 jobs being supported by the drinks industry in every county throughout Ireland.
“A reduction in excise would give welcome relief to both hardworking Irish consumers and the tourist trade visiting our country while also stimulating the growth of an industry which has huge opportunity for job creation.”
At group level, an 8% sales rise against the same period last year was achieved despite a fall of 2% in Europe. Pernod Ricard’s net profit fell however, down 15% to €880m as a result of an impairment charge of €140m on its Absolut vodka brand arising from slacker US sales than anticipated.
Without the impairment costs net profit would have been up 25% on the same period in 2014.
“Our full-year results are solid, delivering improving sales and profit from recurring operations in line with guidance. Our strategy has remained consistent and is delivering results.
"For full-year 2015/16, despite a challenging and volatile macroeconomic environment, we aim to continue gradually improving our business performance,” said Pernod Ricard chief executive, Alexandre Ricard.
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