Why is it that Ireland boasts some of the most well-informed wine consumers in the world?
Though it has a relatively small adult population, imposes high taxes on alcohol, and has traditionally consumed beer and whisky, Ireland has been a good place to sell wine in recent years, particularly if you are a brand owner from the New World.
Why is this? Logistically, Ireland works well. The Greater Dublin Area is home to 40% of the country’s population, the country’s main seaport and the origin of all its key major roads, connecting to the other major urban centres. The economy has been on a positive trajectory since 2014, and recorded GDP growth of 5% in the past 12 months, according to the country’s Central Statistical Office (CSO). Younger, urbanised and educated workers have tapped into the wine culture since the turn of the century, and while most of Europe has witnessed significant falls in wine volumes in the past 5 years, Ireland’s wine market has grown by about 5% during the same period.
Set against this, Ireland has taxed alcohol more severely than most other European countries. It currently has the second highest excise duty levied on alcohol generally, and the highest on wine, within the EU. As Irish campaigners for lower taxes on wine like to point out, Ireland’s rates of duty on wine are 80 times those of France.
However there seems to be something of a silver lining to this aggressive tax policy – or at least that’s one possible reason why Ireland’s wine consumers are among the most knowledgeable of any market that Wine Intelligence tracks. The theory is this: the relatively high taxes – duty on a 75cl bottle of wine is EUR 3.18, plus consumers pay 23% VAT at the point of purchase – make the consumption of wine a more thoughtful affair from the start. Spending Eur 10 or more of a bottle makes you more likely to think about what you’re buying; knowledge about brands and value for money also matters more.
Such theories are ripe for criticism, and clearly there are plenty of other confounding variables such as underlying education levels and the level of sophistication of the supply chain (especially the on-premise). There is also a question of how one measures ‘knowledge’.
For Wine Intelligence’s knowledge index, we measure awareness of different wine producing countries, regions, varietals, and brands. The more of these facts you know, the better your score. In the case of Ireland, the knowledge index stands at an average of 47.4 (0 means you know nothing; 100 means you know everything). Compare this with other English-speaking markets: 35 for Canada, 41 for the UK, and 29 for the USA.
We wondered why Ireland was so far ahead. Looking at the data, country and regional awareness are reasonably comparable between markets (although most of the time Ireland comes top). The big difference seems to be in Irish consumers’ relationship with brand. In Ireland, every one of the top 10 brands have awareness levels of over 60%. In Canada, just 4 brands exceed 60% awareness; in the US, 3; in Germany, only one. Brand, it seems, is a more familiar concept in the wine category in Ireland than anywhere else.
Of these 10 well-known brands, 8 are New World in origin, reflecting the strong performance of brand owners from Chile, Australia and California over the past decade. However it feels like the tide may be turning more in favour of Old World producers in 2020. Our data is showing growing usage of red wine, wine from Spain, and wine from Rioja in particular, a finding supported by some of the interviews we did for the Ireland Landscapes report. Along with Spain, France and Italy are performing quite well, with significantly higher proportions of people now consuming wines from these origins since 2012 – in Italy’s case, undoubtedly boosted by Prosecco, which has doubled its volume sales in Ireland since 2014. By contrast, Australia is suffering in Ireland, seen by declining sales volumes and decreasing proportions of consumers drinking wine from that country.