Home is where the party is as drinkers shun pubs

DRINKERS are abandoning pubs in favour of partying at home in greater numbers than ever before with drinks manufacturers predicting alcohol sales could drop by record levels over the next few months.

However, the Irish Brewers Association said the controversial smoking ban was only partly to blame for a sharp drop in sales in the first half of 2004.

Drinks giant Diageo yesterday reported a 1% decline in the overall market for alcoholic beverages with consumption of Guinness down 6% and sales of leading spirits such as Smirnoff and Bailey’s falling by 11%.

The company blamed a growing trend towards home consumption as the principal reason for falling sales, although it also acknowledged the smoking ban was having an impact on draught beer sales.

The IBA confirmed Diageo’s results were mirrored across the wider drinks industry. Paddy Jordan, director of the IBA, said sales of leading draught beers had fallen by 4% already this year with the decline likely to accelerate over the remainder of 2004.

“We are certainly concerned that [the smoking ban] will have a bigger impact in winter,” Mr Jordan said.

However, he stressed that alcohol consumption had already begun to fall last year, before the introduction of the ban, after several years of static sales.

Manufacturers have derived some comfort from the fact that sales of canned beer to the off-licence sector have risen by around 7% so far this year.

“Ireland has the highest consumption levels for alcohol in the EU and when you’re at the top, there is only one way to go,” Mr Jordan said. He also said consumers were becoming more price-sensitive and, as a result, were favouring cheaper beer available for take-home purchases.

“The cost of drink is not outlandish but there is a price resistance now which we have not experienced in other years,” Mr Jordan said.

Although the Government has not increased taxes on draught beer over several recent budgets, the IBA claims Ireland still has the highest beer taxes in the EU. According to the IBA, the average price of a pint of draught stout was €3.42 at the end of last year with the publican receiving €1.50, the Government €1.07 and the brewer €0.85.

However, the current average is now believed to be around €3.50 following price increases on beers announced by Diageo during 2004 - a move which has resulted in around 200 pubs in the Dublin area refusing to stock some of the company’s brands.

Mr Jordan said the introduction of penalty points combined with “a new respect for laws” affecting alcohol consumption was also having an effect on sales.

The National Off-Licence Association, which represents over 300 independent outlets, said its market share of the total alcoholic beverage market had risen from 15% to 25% over the past decade.

“We believe it has come about more from a social than cultural change. People have put a lot of money into their homes and they want to do their entertaining there,” said NofLA spokesperson, Jim McCabe.

The IBA estimates consumption levels, which peaked in early 2002 with people consuming 11.2 litres per capita, will have fallen to average EU levels of around 10.3 litres per capita by the end of next year.