== Change of direction ==

Traditionally, Ireland's renowned drinking culture was very much associated with going to the pub; but the Irish on-trade is now struggling, especially since Ireland's smoking ban came into force in March 2004. "There has certainly been a drop in the on-trade, but it has been compensated by a rise in the off-trade," says Michael Patten, chairman of the Drinks Industry Group of Ireland and group corporate relations director for Diageo in Ireland. "We attribute 5 per cent [of the decline in the overall market] to the drop in the on-trade."

So it's not all bad news - merely that the Irish alcohol market is undergoing a rapid shift of balance. "In 2001, it was 70 per cent on-trade," says Patten. "This year we're forecasting the off-trade to reach 52 per cent. A significant change has taken place."

Modern lifestyles, says Patten, are a lot to do with this. The increasing options available to people, particularly in the younger age groups, mean that leisure time in the evenings and at weekends is more likely to be spent at home. "People just don't have the time to go to the pub in the week," says Patten.

The situation for the pub trade has been exacerbated by increasingly strict measures, as in many other parts of Europe, to combat drink driving and heavy drinking. "Random breath testing was introduced in Ireland in August 2006," says Patten. "It has had a significant effect." He puts the current level at 30,000 breath tests a month - two-thirds of one per cent of the population.

Coupled with this, the effects of the repeal of Ireland's Groceries Order in summer 2006 have led to lower prices in the supermarket sector. The order prohibited the below-cost selling of many non-perishable items, including alcohol, and the removal of this barrier quickly resulted in rampant cut-price activity and generally declining prices, further encouraging the trend to home drinking.

Folklore has it that as European economies have converted to the euro, so prices have risen; but Patten is clear that this has not been the case for the Irish drinks sector. "It's less of a factor than has been suggested," he says. "It's more the effects of lifestyle changes. In 2005-7, there has been a real-term deflation in the off-trade, and below inflation rises in the on-trade."

== Winners and losers ==

Beer has been a clear loser, reflected in its consistently negative numbers for year-on-year change. "Beer used to represent over 60 per cent of the overall alcohol business," says Tobin, "but it's now only just over 50 per cent."

It has been widely reported that Ireland's flagship brew, Guinness, has been in decline in recent years in its home market; but Patten - wearing his Diageo hat - says that it has levelled out. "We're having a very good run at the moment. We moved back into volume and share growth in May this year," he says. "The on-trade share of the beer market has struggled, but Guinness's share of the on-trade [draught] market has remained robust. We have focused more in the last couple of years in developing demand in the off-trade."

The spirits sector has fared little better, equally influenced by the on-trade. No individual category has seen positive growth since 2003-4 (brandy/Cognac up 1 per cent, white spirits up 0.4 per cent - Euromonitor figures), and in 2005-6 all spirits categories slipped by between 0.7 per cent (white spirits) and 5.1 per cent (rum).

"There was a drop in spirits following a fairly hefty 42 per cent excise increase in 2002," says Tobin. "This led to a fall of almost 20 per cent in terms of the domestic spirits market." But Tobin is hopeful of recovery: "We foresee ongoing growth of about 4 per cent." However, Ireland's tax regime - the second-highest for spirits in Europe after Sweden, and the highest for beer and wine - has not necessarily curbed the nation's drinking. Tobin estimates that more than 10 per cent of spirits consumed now are sourced from outside the country.

To date, the sole beneficiary of Ireland's changing drinks landscape has without question been wine. Euromonitor's figures show healthy growth every year since 2001. In its Wine in Ireland report of June this year, the market research firm states: "Wine shows the first signs of maturity over 2005 and 2006 as volume and current value growth slows following double-digit increases ..." Further, the company predicts, "Wine is expected to see total volume sales grow by 18 per cent" over the period 2006-2011.

In keeping with the documented rises in disposable income in the strong economy, sparkling wine has shown "the most dynamic performance in 2006", increasing by 17 per cent in volume terms, and continued growth is predicted to the tune of 31 per cent up to 2011.

"Market conditions are tough, but you're talking about a market that's 40 per cent bigger than five years ago," s ays Patten. "It is particularly bad in rural pubs; in town they seem to be holding their own. The whole structure of the off-trade is changing, and it's a challenge ."

And Patten is adamant that the rising calls from the health lobbies for yet higher taxes to combat problem drinking are taking the wrong course. "Internationally, tax isn't viewed as a realistic measure," he says.

In a booming economy in a country that relishes the slightest occasion to celebrate, it's always likely to be difficult to micro-manage people's expenditure on drink. After all, says Patten: "Alcohol consumption is more income-related than price-related."