Irish WINE MARKET 2013
About the Irish Wine Association (IWA) The IWA represents wine distributors and importers in Ireland and is part of the Alcohol Beverage Federation of Ireland (ABFI). We promote the economic contribution of the wine industry and advocate on issues that affect our industry. We liaise with relevant stakeholders 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. Our Members Chai rman s statem ent is the number one threat to the wine industry The last number of years have been extremely challenging for Ireland s wine industry. Penal excise increases of 62% over the last two Budgets have pushed the industry to the brink. As well as being a tax on hard-pressed consumers, these increases have put a huge strain on the thousands of small businesses across Ireland that sell wine. Over 1,100 people are employed directly by Irish wine distributors and importers, and thousands more jobs are supported in the 13,000 pubs, restaurants, and independent off-licences that sell wine. The vast majority of these jobs are in small, family-operated businesses across Ireland. In 2013, the sector paid 302 million in excise to the Exchequer, accounting for 30.3% of all alcohol tax receipts. The same period saw volumes drop to 8.2 million cases a fall of 8.2% from 2012. In addition to the impact of a drop in sales, excise increases have created significant cash-flow issues for distributors and importers as many have to pay excise as an up-front cost. The total payment (including VAT) is now 17,958 higher per 1,000 cases than it was in 2012 at a time when the availability of credit is at an all-time low. Ireland s high excise rates have a huge impact on prices hitting consumers disposable income and damaging the perception of tourists of Ireland s value-formoney. Ireland has the highest taxes on wine in the EU, and due to the anomaly of sparkling wine excise being double that of table wine, our taxes on sparkling wine are astronomically out of line with the rest of Europe. Fifteen of the EU-28 charge zero excise on wine. The message coming from the industry is clear: reverse excise increases and support thousands of small businesses and jobs across the industry. A Snapshot: Ireland s wine industry Jobs 1,100 directly employed by distributors and importers. Thousands more employed in the 13,000 restaurants, independent off-licences and hotels that sell wine. Sales in Ireland 8.2 million cases receipts 302 million Consu m ption 16 litres average wine consumption per capita % of alcohol Wine comprised 7% of advertisements advertisi ng pre-cleared by CopyClear up from 3% in 2012 Wi n e prices 75% of wine purchased in Ireland is between 7-10.99 Michael Foley
High excise rates Create cash flow pressures on small businesses Hit consumers disposable income Increase price differentials between ROI and NI Damage tourists perception of Ireland as offering value-for-money : Tax on consumers Hard-pressed Irish consumers have been struggling with reduced disposable income over the last number of years. Since 2011, the tax-take from a standard 9 bottle of wine has increased from 39% of the price to 54%. : Tax on tourism Ireland has the highest excise on wine in Europe, making our tourism offering less competitive. Spanish tourists pay almost twice the price for wine in Irish restaurants that they do at home. Fáilte Ireland research has shown that the price of alcohol is one of the main reasons why tourists wouldn t return to this country. Table wine - 9 standard bottle Impact of taxes at differing price points tax per 750ml bottle 2011 2012 2013 2014 Retail Price 8.00 12.00 18.00 24.00 PACKAGING & DISTRIBUTION 3.20 4.80 4.24 9.60 Ireland 3.19 Finland 2.54 39% 3.53 NO CHANGE 41% 3.65 2% VAT increase 50% 4.46 1 EXCISE increase : Tax on small businesses and jobs 54% 4.87 0.50 EXCISE increase Every increase in excise has a detrimental effect on the cash flow of wine distributors and importers. The total payment (inc VAT) is now 17.958 higher per 1,000 cases than it was in 2012, at a time when the availability of credit is at an all-time low. This has put jobs at risk and has made it impossible to scale up and take on new talent. Tax ( + VAT) Wine 4.69 0.11 59% 5.43 6.56 7.68 1.77 45% 4.24 36% 6.72 32% due on importation of 1,000 cases of wine per month year Year % increase Duty per VAT Payable PER CASE 1,00 cases to Revenue 2012 22.64 23,640 5,437 29,077 2013 41% 33.36 33,36 7,673 41,033 2014 15% 38.24 38,240 8,795 47,035 Overall 62% 14,600 3,358 17,035 increase Portugal UK 2.46 Spain Netherlands 0.66 Belgium 0.43 France 0.03 Luxembourg Denmark 1.11 Germany Sweden 2.01 Czech Republic Austria Slovenia Croatia 0.08 Italy Malta Poland 0.28 Hungary Greece Lithuania 0.43 Romania Bulgaria Estonia 0.64 Latvia 0.48 Cyprus
Wine Sales 2013 Total wine sales 1950-2013 (millions of cases) ALCOHOL CONSUMPTION BY CATEGORY MIX Alcohol beverage market 2003 & 2013 Wine categories (% volume share) H I GH STREN GTH 0.2% LOW STREN GTH 1.0% SPARKLI N G 2.1% Year Sales, millions of cases 1950 0.2 1960 0.3 1970 0.6 1980 1.3 1990 1.7 2000 4.8 2007 8.7 2008 8.4 2009 7.6 2010 8.7 2011 9 2012 8.9 2013 8.2 Source: Irish Revenue Commissioners Clearances data, December 2013 Wine consumption breakdown Red / White / Rose Red White Rose 2003 52% 45% 3% 2004 49% 47% 4% 2005 50% 46% 4% 2006 51% 51% 5% 2007 51% 51% 5% 2008 50% 45% 5% 2009 50% 45% 5% 2010 47% 49% 4% 2011 46% 50% 4% 2012 46% 50% 4% 2013 45% 51% 4% RED 45% Male/female (volume share) MALE 43% FEMALE 57% Source: TGI Data 2013 Age breakdown (volume share) Male Female 2006 43% 57% 2007 43% 57% 2008 43% 57% 2009 43% 57% 2010 45% 55% 2011 45% 55% 2012 40% 59% 2013 43% 57% 6.5% 17% 23.8% 19.1% 16.5% 17.2% BEER WINE SPIRITS CIDER 2003-46% 2003-17% 2003-31% 2003-6% 2013-47% 2013-26% 2013-19% 2013-8% Source; Irish Revenue Commissioners Clearance Data receipts on alcohol ( m) 2010 BEER WINE SPIRITS CIDER WINE AS % 320 210 244 44 2011 307 231 247 44 2012 308 231 284 43 25.7% 27.9% 26.7% 2013 358 302 290 52 30.1% Source; Revenue Commissioners Source; Irish Revenue Commissioners Clearance Data Wine distribution channels 2013 SYMBOL GROUPS 11% FO RECOURTS 6% I N D EPEN D ENTS 11% TABLE WI N E 96.8% M U Lti ples 50% ROSE 4% Source: Nielsen Ireland 2013 WH ITE 51% 18-24 25-34 35-44 45-54 55-64 65+ SPECIALISTS 3% D ISCOUNTERS 19% Source: TGI Data 2013 9.3% 20.3% 21.6% 18.3% 15.8% 14.7% Source: Nielsen, with assumptions for Dunnes and discounters, 2013
Country of origin 20.6% 20.1% Volume share by price point Total wine Vo lu m e Share 15.2% MAT DEC 30/12 MAT DEC 29/13 Vol Share Chg 14 plus 2.2 4.6 2.4% 11.4% 11.2% 13-13.99 1.1 2.3 1.3% 12-12.99 1.5 2.8 1.3% 8.7% 11-11.99 1.7 6.5 4.8% 10-10.99 6.8 10.9 4.1% 9-9.99 8.4 23.7 15.2% 4.5% 3.9% 2.1% 1.2% 1.1% 8-8.99 21.7 18.7-3.0% 7-7.99 22.3 21.6-0.7% 6-6.99 23.0 4.3-18.7% 0-5.99 11.3 4.7-6.6% Australia Chile France Italy Spain U.S.A S.Africa N.Zealand Argentina Germany All Others TOTAL 100 100 Country of Origin Sales and Market Shares for Table Wines Ranking Cases 2000 Cases 2008 Cases 2013 Market Shares Market Shares Market Shares % 2000 % 2008 % 2013 Source: Nielson 2013 Australia 750,000 2,071,000 1,693,235 16.7 26 20.6 Chile 669,000 1,721,000 1,652,137 14.9 21.6 20.1 France 1,043,000 1,060,000 1,249,377 23 13.3 15.2 Italy 386,000 438,000 937,033 8.9 5.5 11.4 Spain 257,000 542,000 920,594 5.7 6.8 11.2 United States 632,000 916,000 715,104 14.1 11.5 8.7 South Africa 332,000 606,000 369,881 7.4 7.6 4.5 New Zealand 41,000 231,000 320,564 0.9 2.9 3.9 Argentina 96,000 87,000 172,611 2.2 1.1 2.1 Germany 118,000 207,000 98,635 2.6 2.6 1.2 All others 160,000 88,000 90,415 2.9 1.1 1.1 Total Table Wine 4,484,000 7,967,000 8,219,587 100% 100% 100% Eu rope 1,946,000 2,335,000 3,238,517 43.4 29.3 39 Rest of World 2,538,000 5,632,000 4,981,070 56.6 70.7 61 Source: official trade statistics, IWA Country of Origin Survey, AC Nielsen and other trade sources.
WINE MARKET 2013
Email: ann.hare@ibec.ie www.abfi.ie The Alcohol Beverage Federation of Ireland Confederation House 84/86 Lower Baggot Street Dublin 2 Telephone: +353 (0)1 605 1581 Fax: +353 (0)1 638 1581