Guinness Toast Pits Diageo Against Medics in Irish Beer Row

More than two centuries after his death, Arthur Guinness is dividing the Irish.

At 17:59 p.m. today, drinkers will raise a toast to the 18th century brewer, who invented the iconic stout in Dublin. Diageo Plc (DGE), which owns the brand, says Arthur’s Day is a celebration that supports Irish bars struggling after the worst recession in the nation’s modern history. Opponents led by medics and musicians say the event encourages binge drinking and disorder in a country beset by alcohol abuse.

“Their mindset is entirely noble in the sense that they’re trying to maximize profits for their shareholders,” said Frank Murray, head of the alcohol policy group at the Royal College of Physicians of Ireland in Dublin. “But the downstream effects of excess alcohol consumption are huge.”

While the event may help Diageo boost falling Guinness sales in Ireland, it’s spurred debate about alcohol in a country home to some of the world’s most voracious drinkers, with the argument dominating radio airwaves and newspapers this week.

The average Irish adult consumed about 11.9 liters of pure alcohol in 2010, almost 40 percent more than in the U.S., according to the latest data from the World Health Organization, and Guinness is still the nation’s favorite stout.

Photographer: Simon Dawson/Bloomberg

Freshly poured Guinness settles in branded pint glasses on a bar in Dublin. Close

Freshly poured Guinness settles in branded pint glasses on a bar in Dublin.

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Photographer: Simon Dawson/Bloomberg

Freshly poured Guinness settles in branded pint glasses on a bar in Dublin.

“It’s great to have an extra boost in terms of sales,” said James Hardy, 37, whose family has owned Neary’s pub on Chatham Street in Dublin’s city center since the 1950s. “It’s like an extra weekend day.”

Manic Street

Diageo came up with Arthur’s Day four years ago to celebrate the beer’s 250th birthday. The time, 17:59, refers to the year the Guinness brewery was founded.

It has since morphed into a nationwide festival every September. The London-based company is staging 500 concerts as part of the event, with bands including Manic Street Preachers and the Script turning up at bars.

Arthur’s Day is a “unique music festival,” according to Peter O’Brien, a spokesman for Diageo.

The day draws tipplers who now prefer to drink at home back to bars, the company has said. Irish pubs are laden with 2 billion euros ($2.7 billion) of debt, after bar sales fell by 25 percent since 2005, Allied Irish Banks Plc (ALBK) said last month.

Yet this year, the campaign against Arthur’s Day is gaining momentum. In 2012, emergency ambulance calls in Dublin rose by 30 percent from the prior week amid the revelry, the Irish Times newspaper reported.

Sodom City

Emergency consultant Stephen Cusack in Cork described the streets of the city on Arthur’s Day last year as being akin to the “last days of Sodom and Gomorrah.”

Consumers in Ireland spent about 6.4 billion euros on alcohol last year, the most since 2008, according the Central Statistics Office. Drink-related problems, including suicide, crime and road accidents, cost Ireland about 3.7 billion euros, according to a 2010 report from the government’s health agency.

“We have a discussion in Ireland that’s in a lot of countries about the use and abuse of alcohol,” said Ireland’s Deputy Prime Minister Eamon Gilmore in an interview at Bloomberg’s New York headquarters today. “It’s about getting that balance right.”

Gilmore said Diageo’s approach is “relatively light-hearted.” Artists playing at Arthur’s Day gigs will tell customers to drink responsibly and Diageo is encouraging pubs to give out free water, O’Brien said.

Drink Aware

The firm also funds www.drinkaware.ie, a website founded by distillers that gives advice on how to drink responsibly. Topics on the site include “pacing your drinking,” “booze and sun holidays -- what you need to know,” and “the morning after -- time is the only cure.”

While some drinkers may overindulge, at Neary’s people enjoy the day sensibly, said Hardy, whose pub opened in 1853.

“Our customers embrace the occasion responsibly,” said Hardy. “People will come in here, have a good time for a few hours and at 5:59 they’ll raise a glass to Arthur Guinness.”

The Waterboys, whose song “Fisherman’s Blues” reached No. 3 on U.S. rock charts in 1989, released three songs to protest the event as a “phoney national holiday.”

“We’ll leave the streets in tatters on Arthur’s Day, because drink is all that matters on Arthur’s Day,” Mike Scott, the group’s front man, sings on “A Song for Arthur’s Day.” “We’ll raise a glass, fall on our ass, and never give a damn or half a bother that we’re all just fodder for an advertising scam on Arthur’s Day.”

Brand Loyalty

While the company has also established a fund in Guinness’s name to invest in projects designed to “make Ireland a better society,” the event is also about building loyalty, Diageo spokesman O’Brien said.

Though Diageo says Guinness is the top-selling stout in the world, sales were little changed for the year ended June 2013. Irish sales fell 5 percent, outpacing a 3 percent drop in western Europe.

“It’s just another way of Guinness building its consumer base,” O’Brien said. “It’s a massively important part of the Diageo portfolio.”

To contact the reporter on this story: Donal Griffin in Dublin at dgriffin10@bloomberg.net

To contact the editor responsible for this story: Dara Doyle at ddoyle1@bloomberg.net

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