Posted: May 31st 2006
“After a prolonged period defying the laws of economics, Ireland’s publicans have finally discovered that keeping prices down actually increases sales.”
So reads the introduction to a piece on increased bar sales from Amárach Consulting in the latest issue of its periodical, /x-tad-smaller>The Irish Consumer/x-tad-smaller>. An attractive proposition for the consumer, certainly, but how accurate can it be? People can confuse the whole issue of prices in pubs and ‘Rip-off Ireland’ with cultural change, the inevitable rise in off-trade business over the past few years, alcohol abuse and the smoking ban.
Firstly, the on-trade here enjoys one of the highest shares of the drinks market anywhere in Europe at over 60 per cent. Don’t believe for a moment that this is merely down to having had cheap drink prices at some mythical moment in the past. It ain’t so.
Secondly, in the absence of all other factors, the idea that a growth of the off-trade market will be paralleled by a growth in alcohol abuse ain’t necessarily so either. Elsewhere in Europe, a largely dominant off-trade has not witnessed alcohol abuse on the scale predicted for same here. But the Irish case has other points to ponder, cultural ones. Socialising in an Irish pub has been part of our culture for so many years. It’s an ingrained part of who we are. This has been reflected in the stereotypical loquacious Irishman abroad. It has also, unfortunately, been reflected in the stereotypical /x-tad-smaller>drunken/x-tad-smaller> loquacious Irishman abroad.
Thirdly, the latter-day drift to the off-trade is not simply down to high prices. It’s part of our ongoing cultural change. It’s part of our higher standards of living in the home.
‘High prices’ play but a bit-part in all this. Prices on the Continent are higher while the quality of decor and standard of service provided falls far short of that provided in the Irish pub on the whole. The Irish licensed trade /x-tad-smaller>invests/x-tad-smaller> in its on-trade product. It invests /x-tad-smaller>heavily/x-tad-smaller> in its on-trade product, accepting lower margins than would be the case on the Continent for a product so a heavily-taxed by the time it reaches its customers lips. That is the essential difference between those advocating the ‘price’ argument for increasing sales and those seeking to convince us that providing the best quality of service, product and decor at the best possible price will give a competitive edge in getting the most custom from this declining on-trade market.
Drinks Industry Ireland