It’s not a secret that the modern liquor market has changed greatly over the past twenty years. Since the early 80s, people have understood that it’s much better for their overall health to drink in some moderation as opposed to drinking heavily. These changes in the drinking habits of consumers made people drink less liquor than they used to in the past. That’s why their consumption of liqueurs dropped considerably.
Another important aspect is that well-known and reputable liqueurs, such as Baileys, had to handle increased taxes and tariffs. When it comes to the US market, tax margins between distributors and retailers were quite close. As an example, distributors need to pay 10%, while retailers need to pay 15-20%. The US also imposed more than $20 per import duty, while state excise taxes are 20%.
For foreign liquor producers, if you want to sell liquor, you will have to pay taxes related to import duties. This is what makes all of them increase their prices considerably. Besides, there are so-called Paddington taxes that increase retail prices even more. It’s clear that retailers need to add their expected profit margins to each alcohol case, thus growing the price.
When consumers finally want to buy this kind of product, they need to pay a lot of money for taxes in addition to a special tax to a final retail price. This is what increases the retail prices of liquor at least twice. Don’t forget that American companies also need to pay other taxes in addition to import duties, and this is what causes enough for prices to grow and urge most consumers to keep buying something American.
For Baileys, the main problem is not only the US, but the thing is that each European country has the same tariffs and taxes that must be paid. In terms of the international market, it’s something that everyone has to deal with. There is another widespread issue in the global liquor industry because it has to deal with the so-called copycat competition. It’s quite easy for others to make similar products within a certain country that will cost less because of the expenses involved in developing foreign markets.
In conclusion, the market share of Baileys has dropped considerably over the past 5 years, and the main reason is that the market created was not so large so that they barely own 50% of the entire market share in America. This happens because of different taxes and tariffs that must be paid.
It’s not a secret that the modern liquor market has changed greatly over the past twenty years. Since the early 80s, people have understood that it’s much better for their overall health to drink in some moderation as opposed to drinking heavily.