FRENCH and Italian football supporters won't be the only nervous observers of today's World Cup Final in Berlin. For tournament sponsor Budweiser, which blitzed the airwaves over the past month, it's the last chance to play on its association with the event to win over beer drinkers.
So far this year, Bud's parent company Diageo has struggled to shift its stout and lager brands, including Guinness and Carlsberg, and nowhere is that more evident than in Ireland. Diageo's recent half-yearly trading statement warned that the overall growth of its beer brands "has been constrained by the weakness of the Irish beer market".
Overall consumption of beer in Ireland peaked in 2000 and has been in decline for the past five years. The volume of beer drunk by Irish people has fallen 9% in that time. The brewing industry points to the smoking ban, the growth in popularity of wine, spirits and other drinks and a more health-conscious population as being behind the drop. The Irish Brewers Association also claims the increases in excise duty, which have helped push prices up, have contributed to a decline in consumption.
Surprisingly, while Diageo remains downbeat on the 3bn Irish market, its rivals in the beer pit take a very different view. Alf Smiddy, managing director of Beamish and Crawford, says recent market research data suggests the beer market has experienced something of a revival in recent months.
"The beer market actually, up to June, is growing by 1.3% on the back of a number of years decline, " he said.
According to Beamish and Crawford's data, sales in the off-trade, which encompasses off-licences, shops and other outlets, are up strongly over the year. An 11% rise in offtrade sales has made up for continued weakness in pub and restaurant (on-trade) beer sales, which have fallen by 1.3%.
The on-trade represents by far the largest source of beer sales, accounting for over 70% of the market. On-trade sales also carry higher profit margins.
"The big challenge here, though, is that over 90% of stout is consumed in the ontrade, " said Smiddy.
That has certainly hit Guinness sales in recent years. More Irish people are drinking at home than ever before. Guinness and other stout brands have always struggled to convince drinkers to buy canned or bottled stout as opposed to lager or spirits when they drink at home.
Diageo said Guinness sales fell 9% over 2005 alone. The beer market has moved against Guinness over the last decade. Ten years ago half of all beer consumed in Ireland was stout and over 90% of that was Guinness.
Now stout accounts for just over a third of the market.
Guinness has also been under pressure from rivals, including Beamish, which have undercut Guinness prices and expanded distribution, eating into Diageo's market share.
Alf Smiddy said Beamish stout sales were up by double digits in percentage terms last year, further upping the pressure on its rival.
In the lager market, the latest available figures indicate that competition is intensifying.
Declan Farmer, corporate affairs director for Heineken Ireland, said its main brands are on the rise.
Heineken broke the 20% market share barrier for the first time last year, he said, increasing its share by a full percentage point over that period.
Elsewhere, Inbev Ireland, which has Becks and Stella Artois in its portfolio, last month reported that its beer sales were up by a quarter over the course of 2005. Beamish and Crawford reported double-digit growth for its mass market brands, Fosters and Miller.
As all those brands are on the march, Budweiser, the number one lager in Ireland, is under serious pressure to hold on to its position. A good World Cup campaign could be just the thing to turn the tide.
With the company due to report its interim results next month, Diageo will be hoping that the thousands who tuned in to watch the tournament on television in Ireland were drinking Bud.
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