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Drinks industry purchasing worth over €2.8bn to Irish economy annually – report

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Drinks industry purchasing worth over €2.8bn to Irish economy annually – report

February 11
14:22 2013

A new report from the Drinks Industry Group of Ireland (DIGI) has found that the Irish industry is responsible for total purchases of over €2.8bn each year.

Industry purchases include ingredients used in processing such as apples, barley and milk; non-industrial services such as IT and marketing; industrial services; and labour costs and wages.

Measuring the value of inputs is a method of evaluating an industry’s contribution to the domestic economy.

The report, ‘Purchases of Inputs by the Drinks Industry’ by Anthony Foley of Dublin City University Business School on behalf of DIGI, shows that in addition to the direct economic benefits of 64,000 jobs, over €1bn in exports, €1.8bn tax revenue in VAT and excise and almost €7bn in personal expenditure (including VAT), the drinks industry is a very substantial purchaser of inputs.

Wage, salaries and personnel costs are one of the highest inputs and total €1bn per annum, with retail, wholesale and on/off-trade sectors paying €690m in personnel costs each year and the manufacturing sector paying a further €311m.

Purchasing of Irish materials and services for use in drink manufacturing in Ireland is worth €800m to the domestic economy. Of the total purchases by manufacturers – €1.558bn which excludes goods bought for resale – a high proportion of those materials and services are domestically sourced, at 62pc and 42pc respectively.

“The drinks industry, both manufacturing and retail, plays a very substantial role in the procurement of inputs as is apparent from this report,” said Foley.
“Previous DIGI reports have identified the direct economic benefits which derive from the drinks industry in terms of employment, output, exports and tax revenue and the positive impact which the sector has on tourism. An industry also contributes to the economy through its procurement from other suppliers.

“As identified in this report, mainly through the use of official CSO data and identified assumptions where data is insufficient, the drinks industry is a major purchaser of goods and services. This is true of both the manufacturing and retail sectors of the industry. The analysis shows that the manufacturing sector in the drinks industry pays €217m in wages and salaries, buys €901m annually in materials, buys €33m in industrial services and €587m in other services and will invest over €450m over the next few years.”

Chairperson of DIGI and Diageo’s European corporate relations director Peter O’Brien added: “The economic contribution that the drinks industry makes to the Irish domestic economy each year as detailed in this report demonstrates the importance of the sector. It is apparent that where the industry can, it is supporting domestic business.”

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