The next few years look tough for spirits companies in Spain

The next few years look tough for spirits companies in Spain

Spirits producers operating in Spain could see sales fall by 10% to around EUR1.6bn (US$2.23bn) this year amid the country's deep recession but could see an improvement next year, according to trade consultant DBK.

A report from the company, released earlier this week, says that alcohol consumption in Spain will continue to be pressured by the country's economic crisis, which will see GDP contract by 0.9% this year. DBK believes that falling private consumption in the country's bars and restaurants will continue to hit alcohol sales and will likely lead to heavy price and promotional war between brands in coming months.

Last year, spirit sales in Spain fell by 12%, with brandy, vodka and whisky the worst-hit categories. The white-spirit brands of rum and gin proved more resilient.

Looking forward, DBK says that improving forecasts for Spain's economy next year should help boost consumption in the country, which is one of Europe's top markets for alcoholic beverages. However, sales could still fall in 2011 by around 5% to EUR1.5bn.