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Guinness maker Diageo’s net Irish sales leap 71%

Linda Stewart — Thu, 28 Jul 2022 09:57:00 +0000

Operating profits at Diageo, the world’s largest spirit maker, jumped 18 per cent to £4.4 billion (€5.2 billion) in the 12 months to the end of June, spurred by the pub sector’s recovery and “resilient consumer demand” for off-sales.

The Guinness maker’s net Irish sales also increased 71 per cent in the year, wiping out a Covid-related decline in 2021 and mostly driven by sales of the stout.

Preliminary year-end results for the drinks giant show sales across its product range increased by more than 21 per cent globally to £15.5 billion (€18.4 billion) in the London-listed company’s latest financial year.

The Smirnoff and Gordon’s Gin maker said the figures reflect “strong double digit growth” across all regions, underpinned by favourable industry trends including the growth of premium spirits brands.

Europe, where Diageo’s net sales increased 26 per cent, led the charge as pubs and bars reopened across the Continent. Spirits net sales grew 24 per cent, Diageo said with “broad-based growth across scotch, vodka, Baileys, gin, rum and raki”.

Beer net sales, meanwhile grew 63 per cent, following a 21 per cent decline in Diageo’s 2021 financial year, “with strong growth in Guinness driven by the on-trade recovery in Ireland and Great Britain, as well as growth from innovation”.

Diageo’s net sales in Ireland increased 71 per cent, “lapping a significant decline” in 2021, the company said, and driven “by strong growth in Guinness” as pubs and bars reopened. Overall, European sales of Guinness jumped 52 per cent in the 12 months to the end of June.

The company, which announced plans in June to wind down its Russian operations by the end of the year on foot of Russia’s invasion of Ukraine, said its Eastern European sales were up 18 per cent more than the period. However, sales in Russia were down, it said, and Diageo took a £19 million impairment charge for the year in relation to its Smirnoff operations in the country.

Diageo chief executive Ivan Menzes said he was pleased with the company’s performance.

“In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams. Our net sales growth was across categories,” he said.

“Looking ahead to fiscal 23, we expect the operating environment to be challenging, with ongoing volatility related to Covid-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty. Notwithstanding these factors, I am confident in the resilience of our business and our ability to navigate these headwinds.”

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Beer production, sales and exports fell last year

Linda Stewart — Tue, 10 May 2022 08:35:40 +0000

Hospitality venues closed in Ireland and abroad due to Covid-19 restrictions, creating challenging conditions for brewers based in Ireland, the analysis found.

Sales also fell last year, down 1.3% overall, with consumption on a per capita basis dropping 2.3%.

“Today’s report illustrates the significant impact the pandemic continued to have on Irish brewers last year, with production particularly hit,” said Peter Mosley, Managing Director of the Porterhouse Brewing Company and Chair of Drinks Ireland | Beer.

“There were some signs of early recovery, as consumers returned to the on-trade in the second half of the year.”

“Prior to Covid just over 60% of beer sales were in Ireland’s pubs, restaurants, and hotels. In 2020 an estimated 29% of beer sales were from the hospitality sector, but this rose to 46% in 2021.”

The Irish Beer Market Report also shows that beer worth €246m was exported in 2021, 3% less than the previous year when exports also decreased.

The largest amount was sent to Great Britain, with the US the second most popular overseas market.

Despite the reductions in production, sales and exports, beer remains Ireland’s most popular drink.

Because it is mostly drunk in pubs, stout sales suffered considerably during the pandemic, but recovered last year by 6.9% to 32.2% of overall market share.

However, sales of lager, which rose as people consumed beer at home during restrictions in 2020, decreased again last year by 8.3%, while non-alcoholic beer sales increased from 1.1% to 1.5% in 2021.

Overall though, consumption of beer fell 9.6% over the past three years and is 30% below the peak in 2001.

“Following two of the most challenging years for the brewing sector and the ongoing issue of spiraling business costs, we are calling for an excise reduction in this year’s Budget,” said Jonathan McDade, Director of Drinks Ireland|Beer.

“This would enable more investment and innovation within the sector. It would also benefit hard pressed consumers, facing rising cost of living pressures.”

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Alcohol consumption drops 9.6% between 2019 and 2021

Linda Stewart — Thu, 24 Mar 2022 10:14:11 +0000

Alcohol consumption fell by 4.7% between 2020 and 2021 as the hospitality sector endured strict lockdowns in an effort to stop the spread of Covid-19, according to new provisional data from Revenue.

Alcohol consumption saw a fall of 9.6% between 2019 and 2021, which Drinks Ireland said showed the true impact of Covid related restrictions and closures on hospitality venues.

Beer and cider consumption saw the most dramatic declines due to their popularity in pub trade. Beer consumption fell by 18.3% between 2019 and 2021 and cider was down by 15.1%.

Meanwhile, wine consumption was down by 13.1% between 2020 and 2021 and by 2.7% between 2019 and 2021.

Spirits consumption remained relatively static, rising marginally by 1.9% between 2019 and 2021.

Drinks Ireland said that people have progressively been drinking less since 2001. It noted that alcohol consumption is now at its lowest level in 20 years and has fallen by about 30% since 2001.

Patricia Callan, Director of Drinks Ireland, said today’s data shows the continued decline in alcohol consumption in Ireland, exacerbated by the Covid pandemic.

“The industry has worked hard to continue to tackle alcohol misuse. The growing trend we see at home and in other established international markets is people choosing to drink quality over quantity, which we welcome and will continue to encourage,” Ms Callan added.

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Carlsberg to expand into cocktails and ciders in bid to drive earnings growth

Linda Stewart — Fri, 04 Feb 2022 10:06:33 +0000

Carlsberg expects earnings to grow faster than sales over the next five years as the Danish brewer expands in premium beers, no-alcohol brews, and other categories such as ready-to-drink cocktails and hard seltzer.

The company is forecasting an average annual increase in revenue of 3% to 5% between 2023 and 2027, Carlsberg said.

Ahead of issuing 2021 results, Carlsberg said 2022 will be a transition year.

It also said it plans to tap growth opportunities in the UK, France, Switzerland, China, India, and Vietnam.

The company said it will expand its Garage and Somersby brands as it explores non-beer categories, which also include cider and hard lemonade.

This year may suffer from a difficult comparison. The brewer has forecast operating profit would increase as much as 12% in 2021 after sales of its Tuborg and Kronenbourg 1664 Blanc brands surged in China, a key battleground market for brewers.

Launching its new five-year strategy, Carlsberg said: “Consumers are increasingly looking for beverages outside the beer category, such as cider, hard lemonade, hard seltzers, and ready-to-drink cocktails. We see attractive growth opportunities in several of these categories, leveraging brands such as Somersby and Garage.”

Last year Budweiser said it was speeding up its testing of new products, primarily for the China market, to keep pace with changing consumer tastes.

Energy drinks, seltzers, and non-alcoholic drinks are in its product pipeline.

“There are some consumer occasions and functional needs that we can answer with beer, but others we can better suit with other products,” the brewer said last year. “Chinese consumers are spoiled with choices, so we want to give more choices.”

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Minimum pricing on alcohol comes into force across Ireland

Linda Stewart — Tue, 04 Jan 2022 10:09:50 +0000

The law will mainly affect alcohol sold in off licences, shops and supermarkets and means a standard bottle of win cannot be sold for less than €7.40 and a can of beer for less than €1.70.

Spirits like gin or vodka with 40% alcohol content cannot be sold for less than €20.70 and a 700ml bottle of whiskey for less than €22.

The new law is expected to lead to an upsurge of cross-border sales at off-licences and supermarkets in Northern Ireland.

The Stormont Executive has been urged to introduce similar legislation, but work on a public consultation on the issue has not been completed.

Minister for Health Stephen Donnelly and Minister of State with responsibility for Public Health, Well Being and the National Drugs Strategy Frank Feighan have welcomed the move, saying Ireland is now one of only a small number of countries in the world to introduce minimum pricing.

Scotland was the first in Europe to introduce it in 2018, followed by Wales in 2020.

Other countries and territories that already have a legal minimum price include the Russian Federation and regions in Australia and Canada.

A minimum unit price of 10c per gram of alcohol is provided for in Section 11 of the Public Health (Alcohol) Act 2018.

Minimum unit pricing will set a floor price beneath which alcohol cannot legally be sold and will target products that are cheap relative to their strength. The minimum price is determined by and is directly proportionate to the amount of pure alcohol in the drink, the statement added.

Minister Donnelly said: “This measure is designed to reduce serious illness and death from alcohol consumption and to reduce the pressure on our health services from alcohol related conditions. It worked in Scotland and I look forward to it working here.”

Minister Feighan said: “We are taking this action to ensure that cheap strong alcohol is not available to children and young people at ‘pocket money’ prices and to help those who drink to harmful levels to reduce their intake.

“I am proud that Ireland is among the first countries in the world to introduce this measure and to take real action to help those who need it the most.”

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