A new study, commissioned by spiritsEUROPE and conducted by the Institute of Advanced Studies in Vienna, has confirmed the negative impact of the COVID-19 pandemic on Europe’s spirits sector and its entire supply chain.
The pandemic hit on-trade businesses as people stopped going to bars and restaurants, while there was a sharp decline in airport sales following a 70% decrease in passenger traffic in 2020, the study found.
In 2020, the turnover of European spirits producers declined by 8.9% in the EU+ region (EU27, UK, Norway, Switzerland), while the sector’s overall economic contribution in Gross Value Added (GVA) fell by almost one quarter (-24%), data showed.
Off-trade sales in supermarkets and other retailers could not compensate for the losses incurred by on-trade businesses, the study noted.
In addition, off-trade sales declined in certain European countries, such as Germany, Slovakia, the Czech Republic, Malta and Portugal.
Read More: SpiritsEUROPE Welcomes EU-US Tariffs Suspension Over Aircraft Dispute
'A Domino Effect'
Ulrich Adam, director General of spiritsEUROPE, added, “The COVID crisis did not spare the spirits sector. On-trade closures had a domino effect on the entire production and supply chain.
“The report shows that they did not just lead to an overall decline in the production and sales of spirits drinks, but also saw a loss of employment for 320,000 people in the hospitality sector which lost more than one-quarter of their employees within one year.
"This poses a difficult challenge in the coming years as governments will need to continue to support the recovery of this important sector that offers stable employment for many people.”
The study revealed that consumers in southern Europe, particularly in Spain, Greece, Portugal, Cyprus and Malta, cut their spirits purchases by almost a third.
In Norway and Sweden, spirits consumption remained relatively unchanged between 2019 and 2020, with technical increases of about 20%.
However, cross-border shopping – which accounts for a considerable share of the overall consumption in these countries – came to a near-complete halt during the lockdowns, the study noted.
'Favourable Policy Environment'
Adam added, “The crisis hit all players across the whole spirits supply chain hard. The spirits sector is made up of a myriad of small distillers. We should keep in mind that they have been the ones suffering the most in this situation.
“What Europe’s distillers and our value chain partners need now is structural support and a favourable policy environment to become once again an engine for jobs and growth in rural areas.”
© 2022 European Supermarket Magazine – your source for the latest Drinks news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
