Given their reputation for swilling alcohol, a natural supposition is that the Irish drink a disproportionate amount of alcohol compared to the rest of the world. But while the denizens of the Emerald Isle are certainly fond of a drink or two, market anlaysts Euromonitor suggest that there are a number of factors which contribute to the high level of per capita expenditure there.
With spending of €1,584 in 2002, Euromonitor's report shows that the Irish spend more per head on alcoholic drinks than anyone else in the world. But this is not necessarily linked to a high volume of consumption alone - other factors such as taxation and the importance of the pub culture also play a part.
This is not to say, of course, that the Irish are not fond of their drink - indeed they are second only to the Czechs in terms of per capita consumption at ready-to-drink level. This is primarily down to the high volumes of beer consumed in both countries. In Ireland, some 151 litres of beer per person were consumed in 2002 while in the Czech Republic, per capita consumption totalled 163 litres.
However, a somewhat different picture emerges when looking at consumption in pure alcohol terms: Ireland's per capita consumption is just slightly higher than Germany's at 11.8 and 11.5 litres of pure alcohol per head respectively. While Germany is behind Ireland in per capita consumption of beer, it is a higher consumer of wine and spirits, both of which have a much higher alcohol content.
This pattern is also true of some other western European countries, including Austria and Spain, which lag only slightly behind on between 11 and 10.5 per capita litres of pure alcohol respectively. So although Ireland stands at the upper end of the scale in terms of alcohol drinking, it does not stand out in isolation by any means. How, then, do the Irish manage to spend so much more on alcohol?
There's no place like the pub
In Ireland most drinking is done in the pub. An overwhelming 80 per cent of all alcoholic drink sales are made in the on-trade. This phenomenon gives Ireland another world number one spot, since in no other country does the on-trade weigh so heavily, Euromonitor said.
The western European average of on-trade sales stands at just over 40 per cent, while the world average is even less. Sales of alcoholic drinks through the on-trade in Germany account for under 35 per cent, for example.
So although it means forking out more money for a pint, drinking in a sociable environment takes precedence for the Irish consumer. In fact, it could even be said that a sociable environment is more important than drinking itself, since until relatively recently the Irish had a very low level of at-home alcohol consumption - in other words, they were not drinking for drinking's sake, but as much for the craic as for the alcohol kick.
A taxing subject
Coupled with this fact of paying higher than average prices because of the strength of the on-trade, another key contributing factor to the high per capita spending is the role that tax plays. In Ireland, the average price for a half litre of lager in a bar is €3.85 while in Germany the equivalent is €2.00.
A comparison of excise duties explains much of the price differential. Excise duty of €9.88 is paid on every 100 litres of beer of 5 per cent abv in Germany, whereas in Ireland excise duty for the same amount is ten times higher at €99.35.
For spirits, the Irish pay three times the amount of excise duty compared to the Germans. For a standard bottle of wine in Ireland, €2.05 of the retail sales price equates to excise duty while in Germany - as in most other European wine producing nations - there is zero duty on domestically produced wine, which accounts for almost half of wine consumed there.
With harmonisation a cornerstone of the European Union, the European Commission undertook a study on the impact of taxation on consumption patterns and competition in alcoholic drinks at the beginning of 2001. As part of the study, it was considered what would happen in the case of setting all excise duties at the indexed minimum rate across Europe. The main conclusion was that there would be a reduction of beer consumption in Germany, Spain and Luxembourg, while Denmark, Finland, UK, Ireland and Sweden would all experience significant increases in consumption.
Price harmonisation on alcohol, however, is being strongly resisted in all these countries, where high taxation is seen either as a health measures (in the Scandinavian countries) or a convenient cash cow to help fill the government's coffers (as appears to be the case in the British Isles). That tax harmonisation is far from Irish legislators' minds is clear from the fact that they introduced further hikes in tax in 2003, which are estimated to yield €90 million for the Exchequer.
Already faced with a heavy drinking culture, not to mention the substantial contribution that taxes make - estimated at 6 per cent of the total national tax yield - the chance of taxes being lowered in the near future is slim, according to Euromonitor. And, as a result, it is likely that the Irish will retain their mantle of being the highest spenders per head on alcoholic drinks for some time to come.href="http://www.foodanddrinkeurope.com/marketreport/publishers.asp?tri=10=_blank>click here.