ABFI_Wine Facts Brochure

2012
The Irish
Wine Market
Irish Wine Association is a business sector within IBEC
www.ibec.ie
Introduction
The Irish Wine Association (IWA) is dedicated to maintaining the
sector’s importance within the Irish market. In 2012, the sector
contributed €231 million in excise and €215 million in VAT to the
Government. Excise contributions are equivalent to 27% of the
total alcohol excise collected, highlighting the importance of
this sector to the country.
Despite this importance, at the end of 2012, the Government
applied a disproportionate excise increase of 41% on wine
products. The IWA warned that any revenue raised by the
Exchequer through this increase could be offset by losses
accrued through a return to cross-border shopping for wine
as well as the fact that the increase would hit small family run
businesses. These businesses represent the wine import sector as
well as independent retailers and those in the hospitality sector.
Before the excise increase, 2012 was a difficult year for the
industry. Sales, which had begun to improve in 2011, faced a
slowdown of almost 1%. The value of the Irish wine market also
continued to drop. The majority of wine sold in Ireland in 2012
was purchased in the €6 -€6.99 price range.
It is also interesting to note that, despite an increase in the
popularity of wine over the past 20 years, the Irish public
continue to be one of the lowest consumers of wine in Europe
t
at 17 litres per capita, compared with Denmark’s 30 litres.
As we face into 2013, the impact of the enormous excise
increase, on the economy, on the small family run businesses
we represent and the tourist sector will become evident. The
IWA will continue its commitment to preserve our members’
important contribution to the Irish economy.
e
Aoife Clarke
Senior executive.
2
The Irish Wine Market
The Irish Wine Market
3
Irish Wine Association (IWA)
Excise
The IWA is a category association under the umbrella of the
Alcohol Beverage Federation of Ireland (ABFI). As the voice
of Irish wine importers and distributors, the IWA supports the
interests of the wine sector in Ireland.
Ireland has the highest levels of excise in the EU and as a result
is one of the most expensive countries to purchase wine.
There is currently a 28% difference between the Irish and UK
excise rates. Coupled with a VAT difference of 3%, there is real
potential that consumers, could return to purchasing wine in
Northern Ireland and abroad. Currently, approximately 50% of
the cost of an average bottle of wine goes to the Exchequer.
We promote the economic significance of the wine industry; work
with and on behalf of our members; develop evidence-based
policy positions and advocate on issues that affect our industry.
We liaise with legislators, the media and the consumer to create
a more sustainable business environment for our members, as
well as providing members with access to industry information
and an opportunity to share best practice.
Challenges facing the wine sector
The wine industry in Ireland has faced unprecedented
challenges in recent years, resulting in many company closures.
Having grown exponentially from its low base in the 1990s, in
2008/2009 the sector was singled out for an excise increase.
Simultaneously, the recession hit and the phenomenon of
cross-border shopping emerged. This had a significant impact
on the sector and resulted in numerous job losses. Since then,
the industry has worked hard to recover from this set back and
to counteract the significant value removed from the sector.
Throughout 2010 and 2011, the industry began to witness
a recovery in the volume of wine sold. However, the value
remained negative, with price the key decision factor for
consumers as opposed to brand loyalty. At the end of 2012, the
Government once again imposed a large excise increase of
41% on the sector. This increase was significantly higher than the
increases imposed on any other alcohol beverage category.
Protecting Irish tourism
Food and drink, and in particular wine, are important elements
of the tourism experience. The Irish hospitality industry employs
190,000 people, or 10% of the entire national workforce, and
contributes billions of euro to the Irish economy each year. At
present, one restaurant per day is closing in Ireland, while 80%
operate at a loss. This means that 21,000 further jobs are at risk,
with a potential loss to the Irish economy of €700 million. Wine is
a key source of profitability for restaurants and support is vital
to ensure the Irish wine sector remains viable. The Government
cannot continue to impose huge increases in wine excise and
expect the Irish wine sector to remain capable of supporting
the Irish hospitality industry.
Responsible Marketing
The wine industry is committed to marketing and promoting
our products responsibly. We abide by the robust codes of
practice on marketing and promotions. We believe that the
responsible marketing of wine is essential in order to provide
the consumer with relevant product information. Promotion
and sampling are also vitally important to allow the consumer
to select a brand that meets their requirements.
Despite these difficulties, the industry continues to fight to sustain
its position as a key sector and continues to add value to other
sections of the Irish economy. The IWA believe that the following
key areas need to be addressed to ensure the industry’s
recovery and growth.
4
The Irish Wine Market
The Irish Wine Market
5
Wine Sales 2012
Members
Total wine sales 1950 - 2012 (millions of cases)
9.0
8.7
9.0
8.9
8.7
8.4
8.5
8.0
7.6
7.5
7.0
Cassidy Wines Ltd.
Cases (millions)12 x 750ml bottles
6.5
Irish Distillers Ltd
6.0
5.5
4.8
5.0
4.5
4.0
3.5
3.0
2.5
1.7
2.0
1.3
1.5
1.0
0.5
0.6
0.2
0 1950
10 International Ireland
Findlater Wine and
Spirits Group
0.3
1960
1970
1980 1990
2000
2007
2008 2009
2010
2011 2012
Table wine sales 1990 - 2012 (millions of cases)
8.7
9.0
8.5
8.2
8.0
8.6
8.3
8.0
7.3
7.5
7.0
6.3
Cases (millions)12 x 750ml bottles
6.5
Edward Dillon & Co Ltd
5.8
6.0
5.5
5.1
5.0
4.5
4.5
4.0
3.5
3.0
2.2
2.5
2.0
1.5
1.5
1.0
0.5
0
1990 1995 2000 2001 2002 2003 2007 2008 2009
2010 2011 2012
Source: Revenue Clearance Data
6
The Irish Wine Market
The Irish Wine Market
7
The Irish Wine Market
7
Wine consumption breakdown
Alcohol consumption by category mix
Red / white / rose (volume share)
Alcohol beverage market 2000 (% of total volume)
46%
56.6%
Red
8.9%
White
Beer
Spirits
Rose
Wine
50%
Cider
13.2%
21.4%
4%
Source: Nielsen Ireland 2012
Alcohol beverage market 2012 (% of total volume)
Male / female (volume share)
46.6%
Beer
55%
Spirits
19.7%
Female
45%
Wine
Cider
Male
7.6%
26.1%
Source: Dr. Anthony Foley, Senior Lecturer, Dublin City University
Business School
Source: TGI Data 2012
Wine Categories (%volume share) (Source: Revenue Clearance)
Age Breakdown (Volume share)
96.7%
26%
Female
Male
13%
24%
22%
11%
10%
24%
16%
14% 15%
14%
10%
0.2%
18-24
Source: TGI Data 2012
8
The Irish Wine Market
25-34
35-44
45-54
55-64
65+
High Strength
0.7%
Low Strength
2.4%
Sparkling
Table Wine
The Irish Wine Market
9
Wine Distribution Channels 2012 volume share
Retail Price
Share of total market
Average MAT* retail price per bottle (750ml)
Off-Licences
Public Houses
Hotels
& Restaurants
81%
2011
2012
% Chg.
Table Wine
€7.48
€7.72
+3.2%
Sparkling Wine
€9.62
€9.71
+1%
Champagne
€28.20
€28.52
+1.2%
Source: Nielsen Ireland, Total ROI Off Trade Market Excl Dunnes Stores for
MAT Dec 11 Versus MAT Dec 12
* Moving Annual Total
Retail Selling Price volume share %
15%
MAT*
JAN 2012
MAT *
DEC 2012
Vol Share
Chg.
€14 plus
2.7
2.2
-0.5%
€13-13.99
0.6
1.1
0.5%
€12-12.99
1.5
1.4
-0.1%
€11-11.99
2.2
1.7
-0.5%
€10-10.99
6.1
6.8
0.7%
Multiples
€9-9.99
9.5
8.5
-1%
Symbols
€8-8.99
21.7
21.3
-0.4%
€7-7.99
22
22.8
0.8%
€6-6.99
22.3
22.9
0.6%
€0-5.99
11.9
11.3
-0.6%
4%
Source: Nielsen Ireland 2012 & Industry Data
Share of off-licence sector
54%
13%
Independents
Discounters
Others
9%
Source: Nielsen Ireland 2012
12%
12%
Source: Nielsen Ireland 2012 & Industry Data
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The Irish Wine Market
The Irish Wine Market
11
Country of origin sales and market shares for table wines
Irish Table Wine Market Share 2012
Worldwide 2012
Luxembourg
Irish table wine market share 2011
24.0%
58 litr
France
45 litres Portugal
21.0%
42 litres ltaly
41 litres Denmark
30 litres Greece
14.0%
26 litres Germany
4.0%
4.0%
1.0%
Austraila
Chile
Ranking
France
U.S.A
Cases
2000
Spain
Italy
Cases
25 litres Spain
10.0% 10.0% 10.0%
1.0%
1.0%
Cases
2008
2012
Market
Shares%
Market
Shares%
Market
Shares%
2000
2008
21 litres U.K
21 litres Sweden
21 litres
Hungary
20 litres
Czech Republic
S.Africa N.Zealand Germany Argentina All Others
2012
23 litres Netherlands
Ireland
Finland
19 litres 17 litres 11 litres Australia
750,000
2,071,000
2,079,500
16.7
26
24.0
Chile
669,000
1,721,000
1,819,500
14.9
21.6
21.0
France
1,043,000
1,060,000
1,213,000
23.0
13.3
14.0
U.S.A
632,000
916,000
866,450
14.1
11.5
10.0
Spain
257,000
542,000
866,430
5.7
6.8
10.0
2012: 17 Litres
Italy
386,000
438,000
866,430
8.9
5.5
10.0
Source: CSO April 2012 Population Estimate & Revenue Clearances
South
Africa
332,000
606,000
346,570
7.4
7.6
4.0
New
Zealand
41,000
231,000
346,570
0.9
2.9
4.0
Germany
118,000
207,000
86,640
2.6
2.6
1.0
Argentina
96,000
87,000
86,640
2.2
1.1
1.0
All others
160,000
88,000
160,000
3.6
1.1
1.0
Total
Table
Wine
4,484,000
7,967,000
8,664,370
100%
100%
100%
Europe
1,946,000
2,335,000
2,772,598
43.4%
29.3%
32.0%
Rest of
World
2,538,000
5,632,000
5,891,772
56.6%
70.7%
68.0%
Source: International Organisation of Vine and Wine
Annual per capita wine consumption in Ireland
Source: The figures for 2012 are based on official trade statistics, IWA
Country of Origin Survey and other trade sources.
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The Irish Wine Market
The Irish Wine Market
13
Excise Duty
Selected excise duty comparisons per standard bottle
Table wine
Sparkling wine
Rep.of Ireland
€2.78
€5.56
U.K
€2.37
€3.03
Sweden
€1.94
€1.94
France
€0.03
€0.07
Nil
Nil
Italy, Spain,
Germany, Greece
The Irish Wine association is a business sector within IBEC
Rates as applicable on 1 January 2013. Rates applicable for the UK
since 25th March 2013
Breakdown of the price of a bottle of wine.
Packaging/Distribution
etc (40%)
€3.20
€4.80
€7.20
Tax (Excise + VAT)
€9.60
€7.27
€6.15
Wine
€5.02
€4.28
€0.52
Retail Price
€8.00
€7.13
€4.65
€2.18
€12.00
€18.00
€24.00
IBEC is the voice of Irish business and employers both nationally
and internationally. It is the umbrella body for Ireland’s leading
business and industry groups and associations. IBEC represents
more than 7,500 member organisations, of all sizes, in all regions
and across all industry sectors.
With acknowledged expertise in all aspects of business
representation, policy development, employee relations, human
resources, employment law, environment, health and safety, trade
and EU affairs, IBEC is uniquely positioned to provide
indispensible, tailored advice to members. To learn more, contact
IBEC on www.ibec.ie
Comment:
Irish excise duty is the highest in the EU for still and in particular
for sparkling wine. In 2012, wine excise generated €230 million
for the Exchequer in receipts. This is up 5.5% on the previous
year and is equivalent to 27% of the total alcohol excise
collected.
Compared with 20 years ago the market, pricing structure
and profile of sparkling wine means that it is no longer seen as
a luxury product. Despite this, however, the excise regime for
sparkling wine is double that of still wine.
Currency conversion - 85 pence sterling equal to €1.00
Source: European Commission
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The Irish Wine Market
IBEC MISSION
IBEC promotes the interests of business and employers in Ireland
by working to foster the continuing development of a competitive
environment that encourages sustainable growth, and within
which both enterprise and people can flourish.
The Alcohol Beverage Federation of Irela
Irelan
and
a
nd
Confede
Confederation
nfederatio
ation House
ouse 8
84/86
/86 Lower Baggo
B
Baggot
aggott Street Dublin
Dubli
D
lin 2
Telephone
ephon
ne:
n
e:: +353
353 (0)1 605 158
1581
811 Fa
8
Fax
ax:
a
x: +353 (0)1
(
638 1581
63
158
Email:
Em
mai
ail ann.hare
ail:
[email protected]
ann.hare@ibec
c.ie www.ab
www.a
www.abfi.ie
bfi.ie
ABFI is a business sector within IBEC