COVID-19 has had a huge impact on the drinks industry. Let’s sum it up in numbers…
- 441,400 jobs lost
- $8.5 billion in lost sales
- Volume losses of up to 61 per cent
- Value losses of up the 55 per cent.
This is according to the Impact of COVID-19 on the Drinks Industry ABA – Industry report on coronavirus that was released earlier this week.
The report also highlights that April was the worst month on record for liquor sales, as National Liquor News also reported on last month.
This all but disproves the suggestion that sales lost in pubs; clubs and restaurants were being made up for in the off-premise and reiterates that Australians are continuing to drink responsibly during lockdown.
ABA CEO, Andrew Wilsmore, said “despite some initial pantry filling in March, April has been the worst month on record for sales of beer, wine and spirits, consistent with ABS data showing consumption has fallen during the COVID-19 crisis.
“Pubs, clubs and bars are shut and there is no sport on TV, no live music or group gatherings allowed.”
The breakdown
- Beer saw the largest drop in April of 44 per cent. And cider saw the biggest decline at 61 per cent.
- Wine producers are reporting volume losses of up to 70 per cent among small and medium sized enterprises who rely on restaurants as their main route to market. Major wine brands suffered a small decline in April before falling 16 per cent in the first two weeks of May.
- Local distillers witnessed revenue declines of up to 80 per cent due to the sudden closure of distillery doors and regional tourism in late March. Overall, spirits (21 per cent volume decline in April) and RTDs (37 per cent volume decline in April) show both a tale of woe and resilience.
“We knew that the total loss of trade from pubs, bars, clubs, and restaurants was never going to be made up for by a brief, small surge in panic buying during the week people were concerned bottle shops would also close,” Wilsmore said.
Drinking behaviours
These volume losses match official data from the Australian Bureau of Statistics (ABS) confirming the vast majority (85.6 per cent) of Australians are drinking responsibly during the pandemic shutdown. Most Australians’ behaviour is either unchanged or they are drinking less during the time of COVID-19.
“The ABS data shows that 30 per cent of Australians are largely abstaining or not consuming alcohol; 47 per cent are drinking the same; and 10 per cent are drinking less. Only 14 per cent of Australians reported that their drinking had increased.
“DrinkWise sought to dig deeper, commissioning independent research into Australian adults’ experiences of purchasing alcohol and drinking at home, through a nationally representative sample of 1000 consumers.
“Of those who chose to drink, the research found that drinkers were maintaining average consumption of three standard drinks. Over the course of the week, this amounted to just over eight standard drinks in total – well within the official government guidelines.
“For Australians who reported their consumption of alcohol at home had increased, the vast majority continued to drink at moderate levels.”
Impact on Jobs
“Our sector has been the most severely impacted by the coronavirus pandemic as lockdowns and social distancing forced the closure of pubs, bars, clubs, and restaurants. The loss of jobs and revenue in this sector has been crippling.
“At the peak of isolation measures, 441,400 jobs had been lost in hotels, pubs, clubs, restaurants, cafes, takeaway, coffee shops, accommodation hotels and casinos. This represents a loss of a third of their total workforce.”
“The hospitality sector has seen an $8.5billion fall in revenue, which represents 10 per cent of their annual sales.
“The drinks industry was not immune to these employment effects, given its heavy reliance on hospitality and tourism, experiencing a 15.55 per cent workforce decline that severely impacted the livelihoods of many Australians.
“We call on our political leaders to have a laser-like focus on job creation and minimising regulatory and tax burdens as we come out of this crisis. This will be vital to our successful revival so that we can continue to provide employment opportunities and future careers for young Australians,” Wilsmore said.
Liquor Stores Association CEO, Peter Peck, told National Liquor News that this loss of employment and revenue is being felt hard in WA.
“On the back of this data released by ABA, the industry in Western Australia, more so than any other state or territory is feeling the pinch,” says Peck.
“A reduction in disposable income due to COVID-19 coupled with a month long of restrictions has hit many sectors of the industry hard.
“Let’s not forget a third of the state in WA is still facing liquor restrictions (in the Kimberley) and tourism in our north is haemorrhaging.
“This data only validates our initiative to widen the scope to bring in wine producers across the state to help what are mostly small family businesses and try to keep their livelihoods afloat.
“It’s no surprise that on the back of a global pandemic we’ve seen a 50-year low in alcohol consumption, and now the worst alcohol sales in Australian history.
“If there was ever a time to galvanise the industry this is it – right here, right now.”