Introduction
European spirits success is based to a huge degree on tradition, know-how and secret recipes handed down through generations. The existing 44 spirit categories like rum, whisky, vodka, etc and the +/- 250 geographical indications (GIs) registered in Europe, such as Cognac, Irish Whiskey, Polish Vodka, etc… are clear indications of a sector rooted in culture and tradition.
spiritsEUROPE commissioned in 2021 a study designed to quantify the economic and ecological footprint of the European spirits sector (EU27 + UK + Norway + Switzerland = EU+) for the pre-COVID year 2019.
The effects of the production and consumption of spirits must not be underestimated as they provide employment and value added in, e. g., distilleries and also have an impact on upstream (e. g. agriculture) and downstream industries(e. g. the catering sector). The aim of the study at hand is to estimate the effects of the spirits sector on employment, gross value added (GVA) and fiscal effects in every EU+ country by means of a multiregional input-output model. In addition, it also investigates spirits-related tourism effects and the ecological footprint of the sector.
We find the following effects:
- European spirits producers’ turnover in 2019 is estimated to about 26.5 billion Euros. At the same time, spirits worth 23.2 billion Euros have been sold in the EU+ (or 44.4 billion Euros including taxes). Hence, the EU+ is a net exporter of spirits beverages.
- The production and consumption of spirits in the EU+ were responsible for almost 60 billion Euros in GVA in 2019. This was about 0.4 % of the total GVA in the EU+ and would be more than twice the overall gross value added of Latvia.
- All in all, spirits support 1.2 million jobs in the EU+ which is about 0.5 % of the overall EU+ employment and almost approaches the size of the entire work force of Lithuania.
- The largest economic effects (in terms of both employment and GVA) came not from spirits production but from consumption, especially from the catering (on-premise) sector.
- Governments collected spirits-related taxes and duties of about 46.8 billion Euros which is more than a quarter of the annual EU budget. Roughly half of it came from income, profit and other taxes on general economic activity along the value-added chains. The other half came directly from VAT and excise duty imposed on spirits beverages sold in the EU+.
- The emission of about 20 million tonnes of CO2 equivalents are related to spirits production and consumption in the EU+; this is about 0.6 % of what the EU+ emits in total and would be slightly less than the overall CO2 eq. emissions of Lithuania. A land area more than twice the size of Luxembourg is used for agricultural production related to spirits.
It has already become obvious that COVID-19 has had a massive impact on the numbers presented in this study for the pre-COVID year 2019. The quantitative impact of the pandemic on the economic footprint of spirits will be investigated in a follow-up study.
