The Demand for Guinness Beer

Reuters discusses the changes in the demand for Dublin’s great beer:

But the cliche of the Irish pub filled with Guinness drinkers is giving way to a different picture as new wealth, new opportunities and immigration transform tastes and drinking habits in one of Europe’s fastest growing economies. Alongside the decline of Guinness is an increasing appetite for wine, spirits, cider and imported beer … Latest figures from global drinks giant Diageo, which owns Guinness, show local sales for the brand down about 7 percent in the six months to the end of December 2006 from a year before. Wine now accounts for over a fifth of alcohol drunk in Ireland … But the decline of Guinness is by no means global. Sales are doing well in North America and parts of West Africa – where the stronger, bottled local version of Guinness has a reputation, perhaps undeserved, for everything from helping prevent malaria to enhancing male sexual prowess. But while “Irish pubs” have become a fixture across the globe, many in Ireland have been struggling. Guinness reckons Irish pubs are opening abroad at the rate of about one a day – the same rate as rural pubs are closing back home.

In other words, the Irish are enjoying more French wine while Americans are enjoying more stout beer from Ireland. This all sounds like the benefits of free trade to me. If Diageo is selling more outside of Ireland but less in Ireland, why would KLo suggesting that this is the end of Guinness? Of course, one could always turn to the latest Annual Report for Diageo. In fact, we see the following statement from their 2006 Annual Report:

Guinness volume declined 3% although pricing offset weak volumes and net sales, after deducting excise duties, were flat year on year.

In other words, nominal sales are flat but not declining rapidly. While this is not great news, it does not signal the end of this brand. I guess the folks at the National Review do not realize that Annual Reports exist.