For an industry body, passing on the message that consumers may want to buy less of your product may seem suicidal. Yet this is what SpiritsEurope is attempting to do with the concept of “responsible drinking”.
The spirits industry has seen its European sales plummet by 30% over the past thirty years, a trend that is unlikely to be reversed due to public health campaigns, and regulatory pressure.
With the economic crisis, many European countries have introduced punitive taxes and minimum pricing policies to curb excessive alcohol consumption and their related costs: ill-health, road accidents, and sometimes death.
At the European level, the European Commission’s informal alcohol strategy, launched in 2006, aims to reduce the health and social harm caused by excessive alcohol consumption, especially among young people.
>> Read our LinksDossier: Fighting alcohol harm: The EU’s strategy under review
Faced with mounting pressure, spirits makers have put together defensive campaigns and introduced the concept of “responsible drinking”.
This has led SpiritsEurope to convey a counter-intuitive message – that despite the “joy and happiness” spirits can supposedly bring, people should sometimes drink less. Say what?
“There are products which if consumed badly – too much or at the wrong time – cause damage, ill-health or social disruption,” says Paul Skehan, SpiritsEurope’s director general. “So we know our products have this double side to them,” he told EURACTIV in an interview.
‘Responsible’ drinking may not always mean drinking less
Skehan accepts that responsible drinking may mean lowering your consumption in some cases, saying “you should take one or two days a week when you don’t drink at all”. Temperance advocates may not view that as much of a reduction, but it is an acknowledgement that daily drinking is not neccesssarily healthy, either.
Indeed, Skehan is quick to point out that “responsible drinking” may not always mean drinking less. In fact, the harm caused by inappropriate alcohol consumption is higher in Scandinavia than in the Mediterranean, although southern Europeans consume more alcohol on average, according to the World Health Organization (WHO) than their Scandinavian counterparts.
“Those people in the Mediterranean who have a glass of wine at lunch and dinner, and spread that out through the week, they might drink more units of alcohol than someone who goes out on a Friday night in very cold Finland and has fifteen units of beer,” Skehan said.
“So despite the fact that more is consumed in Italy, it’s the way it’s consumed that is also terribly important,” he stressed.
And despite falling European sales, Skehan says the sector’s overall performance is good, with producers building value around premium brands, whose performance are not related to volume. In other words, the price makes up for the lower sales.
“And that’s true for Europe, but also outside. In export terms, the value has gone up by about 35%, so it’s not all about volume but also prestige brands,” Skehan says.
What’s more worrying for the spirits industry is the rising tax pressure, which Skehan says is making the European market “very difficult” at the moment. “If you add in all the austerity measures, it’s a perfect storm against our type of product. First, people have less to spend and second, governments tax higher.”
“I think tax is getting to a point where it’s killing off brands and companies,” Skehan said. Enter the previously-mentioned export market.
Despite the fiscal pressure, the spirits sector remains very profitable, due to a rise in consumption in Russia, China and Brazil, where the emerging middle class is eager to exhibit its newly-acquired wealth by purchasing premium spirits and wines.
Spirits exports jumped from €8.2 billion to €10.1 billion between 2011 and 2012, bringing about €9 billion net back to Europe, industry figures show. “It’s certainly one of the few European export sectors that is booming, and where the net balance of payments is in our favour,” Skehan says, pointing to the geographic indications (GIs) such as Cognac and Scotch, which he says have allowed the sector to build massive worldwide brands.
Cocktails ‘coming back in a big way’
Skehan is even optimistic about the already mature European market, saying a new generation of young consumers are turning to spirits. Although brown alcohols such as whiskeys are often premium brands enjoyed by an older clientele, he says white spirits, such as vodkas and gins are popular with young men and women.
“I think there is quite a modern trend towards cocktails and aperitifs, which are coming back in a big way,” Skehan says. “So I don’t think there is an age problem at all for the sector, it’s pretty well spread through the ages.”
This might prove hard to swallow for health NGOs campaigning against under-age and binge drinking. A report by the National Youth Council of Ireland, published in 2009, said anti-drinking campaigns had failed to deter young people from alcohol, and called for stricter rules on advertising.
Even though “responsible drinking” may be hard to grasp as a concept, alcohol makers will find it even harder to explain the rationale behind their latest campaign: the “responsible party”.
“Even if at first glance it doesn’t sound exciting, ‘Responsible Party’ is fun, real fun!” claims the website created by Pernod Ricard as part of its Corporate Social Responsibility policy. No doubt that a few more years of campaigning will be needed to get that message across.