Value of Irish spirits exports drops by 9.3% in 2023 as consumers grapple with inflation
Jameson maker Pernod Ricard posted a 9 per cent decline in sales in the first nine months of its financial year. It publishes its annual results later this month. Photograph: Igor Golovniov/Sopa Images/LightRocket
Regular Cantillon readers won’t be too surprised by the Drinks Industry Ireland’s latest spirits report, which highlights the rough terrain the global drinks industry is navigating at the moment. After the dizzyingly successful year the sector had in 2022 as international travel and the on-trade generally rebounded from the pandemic, 2023 was an altogether more sobering experience.
While the volume of Irish spirits exported last year was essentially flat from 2022, values declined by a hefty 9.3 per cent. Irish whiskey, the core product in the national portfolio, fared reasonably well with export volumes up 2.6 per cent to 15.6 million cases. The value of whiskey exports, however, slumped 14 per cent to €975 million. Irish gin exports, meanwhile, plunged 6.1 per cent in volume terms with the biggest declines in the standard and value end of the market.
The trouble for spirits exporters is shoppers have reined in spending generally, moving towards cheaper products like beer in the UK and Ireland, and cheaper local substitutes in the Americas. This is particularly worrying for the likes of Johnnie Walker and Smirnoff brand owner Diageo, which has focused on “premiumisation” in recent years, hoping to recoup revenues lost through secular declines in alcohol consumption globally through more expensive, exclusive products.
Dragging consumers up the price ladder might have worked under those conditions and even beyond the lockdown periods. But those habits have slipped in the past 18 months as households grapple with punishing levels of inflation across most of the major economies.
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