Wine in Ireland
Ireland’s buoyant economy has contributed to the growth in wine consumption over the past 10 years. Wine is now well accepted and the introduction of smoking bans in on-trade premises has driven at-home consumption. This has resulted in a decrease in the pub trade and expansion of the off-trade.
Table wine sales rose from 1.5 million cases in 1990 to 8.5 million cases in 2009. This growth was experienced both in the commercial segment of the market and in the premium €10-€15 segment.
However in 2009 wine consumption declined 5% in volume and 8% in value. Consumers have been drinking less, and cheaper (discounts and offer purchases).
The market is made up entirely of imported wine as there is no domestic production. Bottled wine was the most significant imported product into Ireland during 2009 with 95.5% of the volume and 91.3% of the value. Bulk wine accounted for 1.4% by volume and 1% by value. There is a growing market for quarter-sized bottles (187ml) in on-trade channels as consumers experiment more with wine and are guaranteed a “fresh” product.
Australia is the number one supplier of wine to the market, with a 28.2% market share by value and a 27.8% market share by volume (AC Nielsen May 2010).
Ireland imposes the highest excise duty rates on alcohol within the EU, making wine considerably more expensive than in other EU countries.
In 2009 the alcoholic beverage market (excluding wine), experienced a volume decline of 6%. The decline in beer and spirit sales has been partly attributed to increases in excise for spirits and the smoking ban’s impact on on-trade sales. The versatility of wine has proven beneficial, and it’s decline in volume was not as large.
The Irish consumed an average of 17.1 litres of wine in 2009. With consumption in other non producing countries (eg, UK and Denmark) much closer to 20 litres per annum, there is a strong belief that there is room for growth in this market.
Irish consumers are generally price-sensitive. Research has found that Irish women tend to be the main purchaser of wine and they feel more comfortable buying wine in a supermarket.
Distribution and Retailing
The distribution split between the off-trade and on-trade is roughly 70% – 30%. Increased enforcement of drink driving levels, the introduction of the smoking ban in pubs and restaurants and increased price sensitivity have contributed to further cooconing behaviour which in turn will increase off trade at the expense of the on trade.
It is estimated that 70% of the off-trade is dominated by the big three supermarkets; Tesco, Dunnes and Supervalu. Specialist stores are also a significant sales channel in the market. However due to increased competition between these supermarkets, they have experienced considerable trading difficulties in post Celtic Tiger, price sensitive era.
The off-trade stores provide a wide variety of wine for the customer to choose from compared to the small offerings available through on-trade channels. The main driving-force for off-trade sales is the significant price difference compared to the on-trade market.
Further information is available to subscribers via the Export Market Guide in winefacts entry for Ireland.