I thank the Cathaoirleach for the opportunity to address the committee today to consider the sponsorship of major sporting events by the drinks industry. The organisation we represent, the Drinks Industry Group of Ireland, DIGI, is the wider representative body for the drinks industry in Ireland. Membership includes manufacturers, distributors, pubs, hotels, restaurants and the independent off-licence sector. It is an important sector of the Irish economy contributing over €2 billion in taxation revenue per annum, supporting over 62,000 local jobs and it is responsible for €2.8 billion worth of purchases per annum. Our quality brands are exported throughout the world contributing over €1 billion in exports. We are proud of the high-quality, premium brands we produce.
The drinks sector plays an important role in Irish tourism by being part of the positive image of Ireland abroad and through developing many of the now iconic tourist attractions, such as the Guinness Storehouse in Dublin and the Middleton Distillery in Cork. They are now the largest paid tourist attractions in Ireland. Last year they welcomed in the region of 1.5 million visitors through their doors. The Irish pub is consistently cited as one of the main attractions by tourists. The most recent edition of Lonely Planet, one of the world's best-selling travel guides, has ranked going to a pub as the greatest experience a tourist can have in Ireland.
DIGI is committed to promoting our industry and to advocating policies that allow for its sustainable development. I emphasise that the misuse of alcohol is not in the interests of our industry or its sustainable development. It damages our members, brands and the societies in which we operate. We are very clear that we want to work with the Oireachtas, the Government, policymakers and professionals to identify and implement measures which reduce misuse. We are also clear that we do not want to see measures introduced, albeit with the best intentions, that do not reduce misuse but that simply damage an important indigenous Irish industry.
I will outline why we believe long-term educational measures, as opposed to eye-catching but ineffectual bans, are the way forward. Before we move to the solutions and measures, let us identify clearly what the problem is. Alcohol misuse must not get confused with alcohol use. Used responsibly and in moderation, alcohol is part of a healthy lifestyle. There is often a perception put forward that somehow alcohol misuse is increasing in Ireland. For example, committee members were told last week that Ireland had a runaway drinking culture. It simply does not. Alcohol consumption in this country has fallen by over 19% in the past ten years and is fast approaching European norms. The Department of Children and Youth Affairs state of the nation's children report shows that the number of young people stating they have never had an alcoholic drink has increased by 35% in the past eight years. The recent UNICEF report found the percentage of young people who reported having been drunk on more than two occasions has fallen in Ireland and in a detailed survey of 29 countries, Ireland is at average levels.
While weakness in the domestic economy and the continued pressure on discretionary income are clearly having a negative impact on the drinks industry, there has been a substantial societal shift in many areas leading to reduced alcohol consumption. We began to see significant declines in overall alcohol consumption in the years before the recession hit.
Education initiatives, like drinkaware.ie, which we will address in greater detail later, have been responsible for promoting the responsible use of alcohol, while at the same time challenging anti-social drinking behaviours. It can be seen that the large and growing majority is consuming alcohol responsibly. This needs to be borne in mind when it comes to policy solutions. In the view of our industry which is backed up by evidence, proposals such as a ban on sponsorship will not make an impact and will merely punish the majority.
The proposals seek to ban the drinks industry from sponsoring sporting, artistic and music events, such as the Jameson Dublin International Film Festival, the Guinness Cork Jazz Festival, the Heineken Cup and Bulmer's Comedy Festival, as well as countless small festivals and events the length and breadth of the country. These are acknowledged as some of the very best-run events in this country and are a major draw for both domestic and overseas visitors. I have circulated a comprehensive list of these events sponsored by the drinks sector in Ireland.
I do not believe it can be argued that these events are associated with alcohol misuse. The wider evidence and data shows very clearly that there is no link between alcohol sponsorship and misuse. Research published by MR Sports Marketing and Sponsorship Intelligence found no connection between sponsorship and consumption levels. I can provide copies of the report to members.
Where bans have been introduced, there is no evidence they have had any effect on reducing misuse. I refer to the French Loi Evin which restricts alcohol advertising and sponsorship. It is acknowledged that this law has not been successful in addressing alcohol misuse. In addition, recent studies have found that teenage drinking in France is on the increase - a clear indication that other factors are at play in their reasons for drinking alcohol at a young age.
We do not need to look abroad for the data which shows why a sponsorship ban would not work. Beer brands are one of the most active categories in the area of sports sponsorship in Ireland while wine brands do not sponsor any events. Despite this, the wine market in this country has increased by more than 13% in the past number of years while the beer market has decreased by 9% in the same time period. The reason that brands undertake these activities is to encourage consumers to choose their brand over another rather than to drive the irresponsible consumption of alcohol. However, I wish to draw the attention of the committee to the likely consequences of a ban on sponsorship or a proposal to phase it out over a longer period. The sporting bodies have told the committee that such a ban would lead to a significant gap in funding for sports and other cultural activities. This gap would not be plugged by sponsorships from other sectors. This would result in a negative impact on the Irish economy and on how Ireland is perceived. Various organisations are working to attract major international sporting events to Ireland, bringing with them hundreds of millions of euro in tourism revenue into Ireland. The lead-in times for these major events are significant. Therefore, an announcement on a phasing-out of sponsorship will significantly hamper these efforts before they even get off the ground. Furthermore, any move to restrict or phase out sponsorship activities by the drinks industry in the medium to long term will immediately penalise those organisations that receive our investment because brands will begin to wind down their sponsorship activities with the subsequent loss of millions of euro in the short term.
Through our legitimate commercial activity, which is strictly regulated, we promote our products to an adult audience. A ban would be extremely damaging to a vital national industry that supports over 60,000 jobs and contributes €2 billion to the Exchequer. A media blackout would be effectively created in this country.
This is totally at odds with our desire to grow the Irish export economy through the food and drinks market. Under the Harvest 2020 blueprint, an ambitious target of €12 billion for Irish food and drink exports by the year 2020 is set out. Given the right conditions, the drinks industry can play a significant role in attaining that growth target. The Government must be cognisant of this when devising legislation which will affect the industry and its ability to market, promote and sell its products. A black market would mean that brands would be limited in how they could promote new brands, which would impact on innovation and ultimately on investment. Why would an international brand chose to invest in Ireland if it were unable to market new products in this country?
Alcohol sponsorship does not increase consumption. Its restriction would damage the sports that benefit from sponsorship. It would also damage our domestic economy and the potential for growth in the export sector. Due to the open nature of Ireland's media, any ban will have no significant impact on exposure as sponsored activity from other countries will be legitimately viewed by Irish consumers.
Let us for a moment consider how the companies which I represent conduct their sponsorships. The existing co-regulatory structure uses audience profiling and ensures that no sponsorship can take place at events which have more than 25% of their audience under the age of 18 years. These codes have been in place since 2002. They have been jointly agreed with Government and are considered to be among the strictest in the world. In recognition of the need to consistently challenge ourselves and ensure that our marketing and communications reflects the changing market, the industry has proposed the strengthening of our robust code of practice for sponsorship to include Government backing, strict monitoring and sanctions for breeches. Under this new code it would be mandatory for all brand owners and rights-holders to provide responsible server training and to promote responsible drinking at all sponsored events. Activity at the events should be used as a vehicle to communicate these messages. We should be using alcohol sponsorship to promote the message to drink responsibly. I refer to the positive impact of drinkaware.ie which is creating a shift in societal views and affecting real change. Recent attitudinal research into the impact of drinkaware.ie, found that 80% of Irish people believe there is now growing awareness of the effects of excessive drinking. Our industry wants to see the introduction of Swedish-style education models which deliver interventions at a young age and have a proven track record in effecting cultural change. This is detailed in the briefing note which I have circulated to members. Instead of using broad populist, unproven and anti-business initiatives that do not address alcohol misuse, we should be working together to target the societal issues that lead to alcohol abuse.
I refer to a comment by Alcohol Action to this committee last week. It claimed that our industry was, "grooming" children. I do not think I need to spell out the context in which the word, "grooming" is normally used when mentioning harm to children. Not only is this claim completely unfounded, it is also a slur on the 62,000 Irish men and women who work in our industry, from the rural pub owner to the tour guides in our distilleries and breweries. It is offensive to parliamentarians, our parents and communities to suggest that we operate in a society where children are viewed as commodities or where they could be targeted in this manner.
As an industry which makes a significant economic and community contribution to Ireland, we want to see a reduction in alcohol misuse. We are on the same page as campaigners on the majority of issues such as enforcement, education and awareness. We have the supporting evidence to show these actions will work. That is what makes these comments even more disappointing. In the absence of evidence to back up the measures which Alcohol Action wants implemented, it has instead resorted to an attempt to demonise an industry rather than working with us on a common agenda of misuse reduction. It is certain that the programmes and initiatives which will bring about a fundamental reduction in alcohol misuse will require all of us to work together.
