Brewers are happy to drink to a flat beer market, while wine's popularity continues to grow, writes Barry O'Halloran

Falling beer sales aren't quite driving brewers to drink, but a set of mixed results over the last week indicate that the Irish aren't as fond of a pint as they have been.

Estimates of the size of the fall in the Irish beer market over the last year vary between under 1 per cent and around 2 per cent.

It does not look like a whole lot until you consider that the market for beer was said to be worth €3 billion last year.

So the estimates of the fall in that market mean that brewers, distributors and publicans have lost sales worth between €30 million and €60 million.

The people likely to feel this pinch the most are the three big brewers, Guinness, Beamish & Crawford and Heineken Ireland. These are in turn local subsidiaries of multi-national giants, Diageo, Scottish & Newcastle and Heineken NV.

They have all released full-year figures over the past fortnight, and while the information they released on Ireland was thin, it mainly pointed in the same direction - down.

Diageo-owned Guinness was first out of the traps with the news that during the first-half of its financial year (which concurred with the second half of last calendar year), the actual volume of the black stuff that it sold in Ireland fell by 9 per cent. But because its response to this was to put up prices, the value of sales fell by just 2 per cent.

An ongoing shift from the pub trade to off-licences was held to be partly responsible, but changes in lifestyles and tastes were singled out as the real culprits.

The logic runs that as we have become more sophisticated, or just rich, we are no longer happy with just a pint of plain. Guinness does not mix with Armani or Marc Jacobs, so instead we're moving to wine and spirits.

Along with money, TV and cinema also influence consumer tastes. The now defunct Sex and the City sparked a craze for cocktails. Sideways, a film about two friends on a stag weekend in California's wine country, was reported to have boosted sales of pinot noir wine.

Wine seems to be the real winner. Figures from promotional body, the Wine Development Board of Ireland, show that in 2004, we bought seven million cases or 84 million bottles of the stuff. That compared with 4.5 million cases, or 54 million bottles in 2000. This coincides roughly with the period that has seen a decline in beer sales.

In 2004, the average Irish person drank 17.4 litres, around 23 bottles, of wine. There may still be room for growth, as consumers in even the non-wine growing European countries, like Denmark, Sweden and the UK, drink more wine than us.

The actual number of people drinking wine in the Republic has also gone up. In 2004 it was estimated at 1.45 million, twice the 728,000 that were reckoned to be wine drinkers in 1990.

Drinking it does seem to be related to earnings. Of the 1.45 million wine drinkers that the development board calculated were in the Republic in 2004, over one million were drawn from the top four income groups, A, B , C1 and C2, which covers everybody from millionaires to skilled workers.

The actual breakdown within the income groups is proportionately in line with that of 1990. So the significant figure is the increase in the actual number of people that the board classes as wine drinkers.

Presumably economic growth and employment levels approaching two million mean that a growing number of Irish people can be counted in the top income brackets.

While more of us are waxing lyrical about bouquets and after-tastes, the news for beer may not be all bad. Guinness's smaller Irish rivals, Scottish & Newcastle-owned Beamish & Crawford and Heineken Ireland, both based in Cork, this week claimed they had increased their share of the beer market. (For those who limit themselves to pinot noir, that means stout, lager, ale, etc).

Beamish & Crawford's flagship brand, Beamish Stout, increased volume sales by 6 per cent. Declan Farmer, corporate affairs director of Heineken Ireland, said that its stout, Murphy's, continued to perform well, although this was largely limited to its Munster heartland.

That brewery (up to recently known as Murphy's) also tightened its grip on the lager market. The company said that Heineken, the market leader, stretched its lead on its "nearest rival" but did not say what its nearest rival was.

However, it did report that its Irish sales were up over 4 per cent at €325 million in 2005. The other two limited themselves to percentage measures of their increases and shed no light on the actual scale of their businesses.

Lager is now the choice of the majority of beer drinkers, accounting for 55 per cent all sales by volume. Stout commands 38 per cent. Of this, Guinness accounts for 88 out of every 100 pints sold. Those market shares cover pubs and off-licences.

The breakdown of sales is 77 per cent for pubs and 23 per cent for off-licences.

Farmer seems to believe that the worst may over for the brewers and that the market has levelled off. He bases his prognosis on an estimated fall in the overall market of 0.7 per cent in 2005.

"It had been declining by 5 per cent year-on-year since the start of the decade," he says.

"Last year, I would have reported a 5 per cent fall from 2003 to 2004 but the market is only back 0.7 per cent in 2005. What that means is that there has been a levelling off."

Farmer adds that he believes there will be a static market for the next two to three years, which he points out is better than a decline. After a tough half-decade, it looks like brewers are happy to drink to a flat beer market.