Irish customers could face beer price hikes as the industry struggles to cope with a range of external pressures such as inflation which has increased business costs.
Producers focused on driving recovery in the sector suffered a 46 per cent drop in production between 2020 and 2021, with sales down by 1.3 per cent and per capita consumption down by 2.3 per cent.
The annual Irish Beer Market Report from Drinks Ireland|Beer showed that overall alcohol consumption in Ireland continues to decline dramatically.
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Although beer remains the country’s most popular drink, production and sales have been hit by the closure of the hospitality industry last year.
The closure of venues both domestically and in key international markets resulted in another challenging year for Irish brewers in 2021, but there were some signs of early recovery in the second half of the year.
The annual report stated that the value of beer exports fell by 3 per cent last year but was still significant at €246m.
The most popular destination for Irish beer was Great Britain, with the United States in second place.
According to the report, stout sales were heavily hit by the pandemic.
Prior to Covid, around 30 per cent of beer consumed in Ireland was stout. This fell to 25.3 per cent in 2020 but rose by 6.9 per cent to 32.2 per cent last year.
Lager, which was more popular during Covid as it was consumed at home, saw sales fall last year by just over 8.3 per cent, with ale sales up by 1 per cent.
Non-alcoholic beer is also becoming increasingly popular, with sales up from 1.1 per cent in 2020 to 1.5 per cent in 2021.
The industry has called on the government to reduce alcohol excise in this year’s Budget to support recovery and manage pressures.
Irish beer drinkers currently pay the second-highest rate of excise on beer in the EU, with industry leads calling for this to be slashed.
Peter Mosley, Managing Director of the Porterhouse Brewing Company and Chair of Drinks Ireland|Beer, said: “Today’s report illustrates the significant impact the pandemic continued to have on Irish brewers last year, with production particularly hit.
“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.
“Irish brewers are now working to return to growth, driven by strong innovation in the sector from established and emerging players. We have seen some interesting trends in recent years like the growth of non-alcoholic beer, which we expect to continue.”
Jonathan McDade, Director of Drinks Ireland|Beer, said: “Following two of the most challenging years for the brewing sector and the ongoing issue of spiralling business costs, we are calling for an excise reduction in this year’s Budget.
“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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