Tom Hayes (Tipperary South, Fine Gael)
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The purpose of this morning's engagement is to hear the views of Horse Racing Ireland, the Federation of Irish Sport and the Drinks Industry Group of Ireland on the issue of sponsorship of sporting and cultural events by the alcoholic drinks industry. The committee has had two previous meetings on this topic and we propose to conclude our meetings on it today.

On behalf of the committee, I welcome Brian Kavanagh and Michael O'Rourke of Horse Racing Ireland, Sarah O'Shea and Sarah O'Connor of the Federation of Irish Sport and Peter O'Brien and Donall O'Keeffe of the Drinks Industry Group of Ireland. I wish to draw their attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary privilege to the effect that where possible they should not criticise nor make any charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. I also wish to advise them that any submission or opening statement they have submitted to the committee will be published on the committee's website immediately after this meeting. Members are reminded of the long-standing practice to the effect that they should not comment on, criticise nor make charges against a person outside of the House or an official, either by name or in such a way as to make him or her identifiable.

I propose we begin by hearing from Mr. Brian Kavanagh, chief executive of Horse Racing Ireland, followed by Ms Sarah O'Shea, chairperson of the Federation of Irish Sport, and then by Mr. Peter O'Brien, chairman of the Drinks Industry Group of Ireland. I invite Mr. Kavanagh to make his opening statement.

Mr. Brian Kavanagh:

I thank the Chairman for the opportunity to speak to the committee today. This is not a bad day to be addressing the committee, following a fantastic first day at the Punchestown festival, where we had a record crowd and the pleasure of watching a fantastic horse, Sprinter Sacre, the highest unofficial ratings horse over jumps since Arkle 50 years ago.

I am Brian Kavanagh, chief executive of Horse Racing Ireland, which is the commercial semi-State body responsible for the development and promotion of the thoroughbred horse racing and breeding industry in Ireland. Horse racing is, arguably, Ireland’s most successful international sport and contributes almost €1 billion annually to the economy. Ireland breeds more thoroughbred horses than Britain or France and is the fourth largest producer in the world. Horse breeding is primarily an agricultural industry, sustaining up to 16,000 jobs, mostly in rural Ireland. Last year thoroughbred exports from Ireland to more than 35 countries were worth in excess of €174 million and bloodstock sales are one of the few positives in the wider economy, having grown in each of the past three years. It is exactly the sort of industry that will help Ireland’s recovery. It is labour-intensive, rural-based, export-led, environmentally friendly and one in which Ireland has significant natural advantages in terms of both human resources and our environment.

Much of the demand for our horses is driven by overseas buyers as a result of the winning performances of Irish horses at the top level across the globe. In the past month we have seen Irish horses win at group one level in Cheltenham, Aintree, Japan and Dubai. This success encourages owners to have horses in training here or to keep their breeding stock here, generating significant rural employment. It is said that three horses equate to one job in our industry. This is a fiercely competitive area and we must use every advantage to stay ahead. Ireland is struggling to compete with better-funded countries who can offer bigger prize money to attract the best horses into their racing industries. In some areas of the industry, many participants, including some racecourses, struggle to survive as reduced disposable income has an inevitable effect.

Sponsorship of races is one of the key components of keeping our prize money at an internationally competitive level. Sponsorship of racing by the drinks industry has always been a feature of our sport. It represents approximately 10% of the total commercial sponsorship pool for racing. Sponsors spend a great deal more in marketing race meetings and in entertaining customers and staff at the races than just the sponsorship fee. The total value of drinks industry sponsorship to racing is in excess of €1 million a year. Racing has a culture of responsibility around it. We do not permit inappropriate sponsorships and racecourses work with their drink company sponsors in applying codes of practice. Racing is demonstrably aimed at an older rather than an under-age audience. Research shows that the typical racegoer in Ireland is aged 35 or over and experience shows that race meetings are good-natured and convivial events, perhaps the very place where younger adults might observe how to drink and socialise in a responsible manner.

Let me be clear. Racing supports the regulation of alcohol promotion, with an emphasis on the protection of younger people. However, that is not what is being proposed. What is being proposed is a ban, a blunt and crude instrument which takes no account of the likelihood of actually achieving the desired result on a case-by-case basis. Advertising is permitted under strict regulation and the same should be done for sponsorship. It would be wrong to imagine that racing can find alternative sponsors. Commercial sponsorship in racing has halved since 2007, and even in good times, it is the toughest of sales to make. In addition, our famous Irish drinks brands are the product of marketing expertise, which adds greatly to the development of our major festivals and brings an international audience to Irish racing. For example, if sponsorship were banned, while Irish racing fans would have the Hennessy Gold Cup from Newbury beamed to their living rooms, computers and mobile phones, Leopardstown would have to drop one of Irish racing’s most loyal sponsors. Hennessy has been sponsoring the Hennessy Gold Cup for 22 years, coming to Leopardstown in February every year and bringing senior executives and customers from the world’s largest luxury brand groups to Dublin. Hennessy uses the Leopardstown meeting not just for sponsorship but to entertain key business contacts, media people and friends at the races. The public face of the Hennessy brand is Maurice Hennessy, an eighth-generation descendant of Cork man Richard Hennessy, who founded the firm in 1765.

There are other sponsorships. The Powers Gold Cup at Fairyhouse is one of our sport's oldest sponsorships, unbroken since 1960. Today at Punchestown we will see the running of the Guinness Handicap Chase. Guinness support for the Punchestown festival over many years has helped that meeting to grow, to the extent that it now delivers a €60 million annual stimulus to the local economy in Kildare. A similar scenario applies to festival meetings at Galway, Listowel and other courses throughout the country. This is achieved in combination with the expertise of sponsors, including drinks sponsorship companies. This expertise and ability to promote race meetings goes far beyond the financial contribution made and all of these festivals would be at a significant loss without this expertise. Festival meetings are also a significant boost for our tourism industry. It is estimated that we will have 18,000 UK visitors at Punchestown this week and race meetings in Ireland attract 80,000 overseas visitors a year to the country.

Two things stand out in the debate on this subject so far. There seems to be an illusion that sponsorship imagery can somehow be contained in the borderless digital age we are now in, and an assumption that sporting rights holders can handle the removal of this sponsorship. It seems that a basic error is being made in the recommendation to ban sports sponsorship by the drinks industry. The error is the assumption that a ban will actually work. We hear advocates of a ban describing the problem of alcohol abuse in society, without sustaining the case that a sponsorship ban will solve it. We hear, in effect, the case for prohibition. Where does that end? Racing asks for regulation in place of a ban. We ask for a case-by-case approach, only taking action where there is a clear risk of harm. We ask that racing’s unique role in Irish society be seen as an example of responsible and social drinking in a regulated environment, in place of harmful drinking, which takes place largely in anti-social contexts. Our drinks industry sponsors and our racegoers have added significantly to the social and cultural life of Ireland for generations and continue do so.

In conclusion, a ban of sponsorship in Ireland would mean that it would be okay for Irish racegoers to watch and bet on the John Smith’s Grand National in Aintree, the Hennessy Gold Cup in Newbury and the Grey Goose Breeders' Cup in America, but not on the Powers Gold Cup in Fairyhouse or the Guinness Galway Hurdle. It would be okay for racegoers to be exposed to advertising on the way to a race meeting or during the TV coverage of the meeting, but not for sponsorship of races at that meeting. It would also mean a loss of at least €1 million a year to Irish racing and would hand a significant advantage to our competitors in the industry.

Tom Hayes (Tipperary South, Fine Gael)
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I thank Mr. Kavanagh for his well-presented submission.

Ms Sarah O'Shea:

I thank the Chairman and the committee for the opportunity afforded to the federation to address the committee here today. I feel it would be helpful to begin by providing some background on the federation and its role, and then our chief executive Sarah O’Connor will provide more detail on the federation's submission.

The Federation of Irish Sport was established in 2002 by the national governing bodies of sport, who felt that an organisation that could represent the interests of sport and speak on behalf of all of sport as an independent voice was required.

Ms Sarah O'Connor:

As our chairperson stated, Irish sport matters. It is easy to assume in a country as passionate about sport as we are that sport is something which simply happens, or that the success Irish sport has enjoyed in recent years in terms of increased success on the international stage and the growing number of people who are partaking in sport at home is a lucky coincidence. Nothing could be further from the truth. Sport, although it has a largely voluntary work force, still needs to be managed, planned, delivered and, above all, financed. Money for sport matters and funding is crucial. It would be naive to believe that only the three major field sports would suffer from the introduction of a ban on alcohol sponsorship of sport. The removal of an entire category of sponsor would reduce the pool of available sponsors to all of Irish sport, reducing both the availability and the value of the overall sponsorship pool. This would damage all of Irish sport.

The reality is that funding for sport is already in short supply. In particular, overall Government investment has dropped from a peak of €311 million in 2008 to just over €54 million for the current year. Irish Sports Council funding, on which our members are so reliant, has fallen from just over €57 million in 2008 to just over €43 million for the current year. This decline in Government funding has been matched by increased pressure on other revenue streams, in particular, member affiliations, ticket prices, where applicable, and sponsorship. Our members, many of whom struggled to get sponsorship during the best of times, maintain they have never operated in such a challenging sponsorship environment. This is backed up by the reality that some of our most prominent sporting brands have yet to confirm sponsorship agreements for the coming season.

In addition, sport, unlike the rest of the not-for-profit sector, does not benefit from charitable status. This is a reality that places sport at a distinct disadvantage in terms of attracting philanthropic investment compared to the remainder of our colleagues in the not-for-profit sector, for example, those in arts and culture. When discussing sports funding, it is important to reflect on the return that sports provides to the people. The real impact of sport to Ireland is not only on the playing fields or in the sports facilities dotted throughout the country. Irish sport has a significant impact on our communities. Ms O'Shea has already referred to the fact that more than 500,000 Irish adults volunteer in sport each year. This makes sport the biggest single driver of active citizenship in Ireland. A depletion of funding streams would inevitably lead to a redirection of funding from programmes benefiting our communities throughout the country.

The economy is another consideration. Some 40,000 jobs are supported in Ireland from sports. It generates €1.8 billion of household spending each year and contributes 1.4% to GDP. A reduction in funding is likely to see pressure on jobs supported by the sports industry in Ireland. Sport delivers dividends of in excess of €850 million in tourism receipts to Ireland. Banning alcohol sponsorship is likely to have a significant impact on Ireland's ability to bring international sports events to Ireland. The Volvo Ocean race, the Ryder Cup, the European Rugby Cup finals are all examples of past and future sports events coming to Ireland that are dependent on alcohol sponsorship.

Irish sport recognises the significant health and social challenges facing Irish society from alcohol misuse. However, there are many ways in which these issues can be addressed. This point is outlined by the report of the task force on substance misuse which made 45 recommendations regarding the issue, only one of which is the issue before us today. The report also commended the sports industry for its adherence to the existing self-regulation codes, including, for example, the non-display of alcohol sponsors on underage replica jerseys. Irish sport is firmly of the view that a ban on alcohol sponsorship in sports would have a detrimental effect on Irish sports and on the returns sports generates for Ireland. There is a better way which, we believe, is at least worth trying before such a blanket ban is introduced. The alternative is for active engagement between sport and public health officials to ensure that Ireland's sporting network, which is unrivalled in terms of its reach and the number of people involved, can assist the Government in the implementation of its strategy to tackle responsible alcohol usage and other public health issues. When he was before the committee recently, the director general of the GAA, Paraic Duffy, highlighted two programmes the GAA is currently running to address these issues, the alcohol and substance abuse prevention, ASAP, programme and the healthy clubs project. This is something that all in sport would be willing to adopt and roll out. The federation in conjunction with the HSE would be more than happy to facilitate this process.

If a ban on alcohol sponsorship was introduced, where would the line be drawn? Sport could be left vulnerable to similar plans on sponsors from other sectors such as food, soft drinks and betting, thereby further reducing the pool of potential sponsors and, ultimately, funding for support. Sport is good for our economy and it is good for our health. More important at the moment, it is good for our communities. Irish sport matters but it does not simply happen. We need to encourage funding for sport not obstruct it.

Tom Hayes (Tipperary South, Fine Gael)
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I thank Ms O'Shea and Ms O'Connor for their opening statements. I call on Mr. Peter O'Brien to make his presentation on behalf of the drinks industry.

Mr. Peter O'Brien:

I thank the Cathaoirleach for the opportunity to address the committee today to consider the sponsorship of major sporting events by the drinks industry. The organisation we represent, the Drinks Industry Group of Ireland, DIGI, is the wider representative body for the drinks industry in Ireland. Membership includes manufacturers, distributors, pubs, hotels, restaurants and the independent off-licence sector. It is an important sector of the Irish economy contributing over €2 billion in taxation revenue per annum, supporting over 62,000 local jobs and it is responsible for €2.8 billion worth of purchases per annum. Our quality brands are exported throughout the world contributing over €1 billion in exports. We are proud of the high-quality, premium brands we produce.

The drinks sector plays an important role in Irish tourism by being part of the positive image of Ireland abroad and through developing many of the now iconic tourist attractions, such as the Guinness Storehouse in Dublin and the Middleton Distillery in Cork. They are now the largest paid tourist attractions in Ireland. Last year they welcomed in the region of 1.5 million visitors through their doors. The Irish pub is consistently cited as one of the main attractions by tourists. The most recent edition of Lonely Planet, one of the world's best-selling travel guides, has ranked going to a pub as the greatest experience a tourist can have in Ireland.

DIGI is committed to promoting our industry and to advocating policies that allow for its sustainable development. I emphasise that the misuse of alcohol is not in the interests of our industry or its sustainable development. It damages our members, brands and the societies in which we operate. We are very clear that we want to work with the Oireachtas, the Government, policymakers and professionals to identify and implement measures which reduce misuse. We are also clear that we do not want to see measures introduced, albeit with the best intentions, that do not reduce misuse but that simply damage an important indigenous Irish industry.

I will outline why we believe long-term educational measures, as opposed to eye-catching but ineffectual bans, are the way forward. Before we move to the solutions and measures, let us identify clearly what the problem is. Alcohol misuse must not get confused with alcohol use. Used responsibly and in moderation, alcohol is part of a healthy lifestyle. There is often a perception put forward that somehow alcohol misuse is increasing in Ireland. For example, committee members were told last week that Ireland had a runaway drinking culture. It simply does not. Alcohol consumption in this country has fallen by over 19% in the past ten years and is fast approaching European norms. The Department of Children and Youth Affairs state of the nation's children report shows that the number of young people stating they have never had an alcoholic drink has increased by 35% in the past eight years. The recent UNICEF report found the percentage of young people who reported having been drunk on more than two occasions has fallen in Ireland and in a detailed survey of 29 countries, Ireland is at average levels.

While weakness in the domestic economy and the continued pressure on discretionary income are clearly having a negative impact on the drinks industry, there has been a substantial societal shift in many areas leading to reduced alcohol consumption. We began to see significant declines in overall alcohol consumption in the years before the recession hit.

Tom Hayes (Tipperary South, Fine Gael)
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I thank the four people who made presentations to the committee. I have a question for Mr. O'Brien. During all our meetings we have heard very convincing cases presented by the GAA and the IRFU about the level of sponsorship at both national and local club level. Mr. Brian Kavanagh made a very convincing argument about the very great impact of sponsorship on the racing industry. I know from experience in my constituency that well over 1,500 jobs are provided by the racing industry in County Tipperary alone, not to mention in the other counties. Significant numbers are dependent on the sporting sector. How much money is being spent on sponsorship, taking everything into account? It would be helpful information for the committee.

Mr. Peter O'Brien:

Sponsorship expenditure by alcohol companies in sporting and cultural events is in the order of €30 million to €40 million. I can check that figure for the committee but that is my initial estimate. That is the order of magnitude of the sponsorship expenditure.

Tom Hayes (Tipperary South, Fine Gael)
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If sponsorship was not permitted how would that money be used by the companies?

Mr. Peter O'Brien:

We all operate in global markets so we will spend that money wherever we will get a return on our investment. We will use other ways to reach our customers. The purpose of sponsorship is to talk to our consumers and to promote our brands. That is our business. It is entirely legitimate for any company in any sector to talk to consumers and to promote its brands. The simple fact is that it is not designed to get people to increase their consumption. The beer market in Ireland is declining but we are spending our sponsorship money there. We do not do this for altruistic reasons. I can speak for my company, Diageo. We do it because we want the consumer to drink our brand and we compete against someone else's brands. That is the nature of competition and it is a very healthy way to do business. We will use other means of advertising to legitimately promote our brands to consumers.

Tom Hayes (Tipperary South, Fine Gael)
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I thank Mr. O'Brien for that important clarification.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the delegates for the presentations. It seems clear that a ban on sponsorship would have significant repercussions.

Brian Walsh (Galway West, Fine Gael)
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I thank our guests for their very informative presentations. Some of Mr. O'Brien's evidence was contradictory in the sense that sporting bodies are being supported to the tune of €30 million to €40 million. Surely the drinks companies expect some return from that. Will Mr. O'Brien explain why the Drinks Industry Group of Ireland is so enthusiastically opposed to any proposed ban? Obviously it is doing so in order to maximise the return obtained from this type of sponsorship. In such circumstances, there is a slight contradiction in the arguments Mr. O'Brien is presenting. Having said that, I am not really in favour of the introduction of a ban because I do not believe it will have the desired effect in light of the open nature of our media.

Whatever about the merits of introducing some restrictions in respect of sports involving younger people, the idea that we would introduce a ban in respect of the horse racing industry is nonsensical. Primarily, that industry attracts a mature audience. As Mr. Kavanagh suggested, the average age of racegoers is 35. Such people would obviously be regarded as responsible adults who will make their own choices in respect of their consumption of alcohol. As Mr. Kavanagh also stated, the horse racing industry is extremely important and is worth €1 billion to the economy. There are over 15,000 people employed in the industry here. In my constituency, the Galway racing festival provides a huge annual boost to the local economy of something in the region of €60 million. This is replicated at the Leopardstown and Punchestown festivals. Mr. Kavanagh referred to Punchestown and it was extremely encouraging that a record number of people were in attendance at the festival yesterday. The horse racing industry faces a number of challenges, not least among which is the fact that the numbers attending race meetings are diminishing. The calibre of horses that have been involved in this year's festival would simply not have been brought by their owners if the prize money on offer was not pitched at an acceptable level. As Mr. Kavanagh pointed out, one of the most highly rated steeplechasers in history ran in one of yesterday's races. That was the case because of the status of the Punchestown festival. It has gained that status over many years as a result of the support it receives from a plethora of advertisers and primarily those in the drinks industry. The festivals at Galway, Punchestown, Leopardstown and Fairyhouse are all examples of how the drinks industry is making a very valuable contribution to the sport.

The numbers attending race meetings have fallen sharply and the Government is considering alternative ways of funding the industry. However, the suggestion that we should introduce a ban on one of the major sources of revenue for that industry is simply not correct. We must keep the owners interested and satisfied. There has been a decrease in the level of sponsorship for the horse racing industry in recent years and prize money is the key factor in keeping the owners on board. The Irish are renowned the world over for the quality of the horses they produce for national hunt and flat racing. This is due to smaller owners in rural areas who own mares which produce quality foals. Such individuals might not have been in a position to breed horses if their animals had not won prize money in races.

There is some merit in what has been presented to us, particularly in the context of sports involving younger audiences. However, I am of the view that we should not touch the horse racing industry because it is too important to the country's economy.

Mr. Brian Kavanagh:

In regard to Deputy Ellis's comments, the names of races will change if there is a ban on sponsorship. The sponsor buys the right to name the race so the Hennessy Gold Cup would not longer be called that if there was no sponsor. This relates to the issue raised by Deputy Walsh. The prize money in horse racing goes to the issue of international competitiveness. Sprinter Sacre ran at Punchestown yesterday - a number of other very good horses will be running there later in the week - because those who run the festival engaged with our sponsors approximately two months ago. They realised that Cheltenham and Aintree had increased their prize money and, as a result, they approached the sponsors in search of extra money, they asked us to match this and they dipped into their own pockets. As a result, they were able to increase the value of yesterday's race in order to encourage the owners of Sprinter Sacre to allow the horse to run. This had an obvious knock-on effect on the attendance at the meeting. I wish to reiterate that in our industry - I am sure the position is the same in other sports - prize money gives rise to an issue of international competitiveness. If we do not have the right level of prize money, people will not bring their horses here either to run or to be trained. They will go where the best prize money is on offer. There is no sponsorship ban in the UK and they will race their horses in Britain rather than Ireland.

In the context of what the Chairman stated, I am of the view that it would be wrong to confine the value of the drinks companies' sponsorship to the actual cash amounts they invest in sporting events or races. What they also bring is a very high level of marketing expertise. Deputy Walsh referred to the Galway festival, which is a product of those who run the track working very closely with the sponsors - Guinness is the principal sponsor - to develop the meeting. In research carried out by UCD in respect of the festival, it was estimated that it is worth €60 million to the local economy each year. That is not just the position in Galway. I refer, for example, to the seven-day festival held in Listowel, which is probably the biggest of its kind in that part of the country and, again, those who organise it work closely with the sponsors, who invest money in the prize fund and who bring their marketing and promotional expertise to the development side. That is very valuable to the racing sector.

Ms Sarah O'Shea:

I wish to return to the Chairman's initial question on the value of sponsorship. Onside Sponsorship, the leading consultants and research specialists on sponsorship, estimate that the total value of sponsorship to sport alone was €35 million. This does not take account of the marketing and human resources expertise which the drinks companies bring with them to sport. It is worth noting that the total budget for the Irish Sports Council in 2013 is just over €43 million.

Mr. Peter O'Brien:

I agree with Deputy Ellis on the point he made about tourism. Many tourists come to this country and they enjoy our pubs. No tourists say that they have a problem with people drinking irresponsibly in the pubs. They think it is a great place to go and have a convivial drink.

On the public heath issue, there is an issue in Ireland in terms of a minority of people who misuse alcohol, and we would all agree on that. Our job is to work together to find the right solutions.

On Deputy Walsh's point, there is no contradiction whatsoever in what we are doing. The reality is that we invest money to get consumers to pick our brands over other brands. That is absolutely the case. On the figure of €35 million that Ms Sarah O'Shea mentioned, we heard that the figure generated in Galway was €60 million. If one adds it all up, that figure of €30 million leverages about €500 million of economic activity across the length and breadth of the country.
Chairman: Does Ms O'Connor wish to add a further comment?

Ms Sarah O'Connor:

In response to Deputy Walsh's point, because sport is all around us in this country, we can look upon it as something that can be taken for granted. Sport is a huge contributor to the economy. It is an industry and supports 40,000 jobs in Ireland. If we include horse racing, it supports 20,000 jobs and those two figures add up to 60,000 jobs. Sport accounts for €2.4 billion to the Irish economy. To take last summer alone, which was a significant summer for sport, the European Championships, the Olympic Games and Paralympic Games in London led to a boost in spending by Irish consumers on sports-related goods and services to the value of €86 million. As well as sporting activity, which is at the hub of all we do, when examining sport we also need to look at the bigger picture.

Tom Hayes (Tipperary South, Fine Gael)
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I call Senator Paschal Mooney.

Paschal Mooney (Fianna Fail)
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I apologise to those who made earlier presentations for not being here; I was here earlier but had to leave to attend another meeting but my colleague, Deputy Dooley, was present.

I must advise the representatives that I have always been deeply uncomfortable about drinks sponsorship of sporting activities. Behind the glamour and facade of glamour that is presented, I keep thinking about the people who are lying in hospital beds as a result of the abuse of alcohol. Even today a significant article in today's edition of the Irish Independent tells of children as young as 15 years of age ranging up to those in their middle 40s who are suffering from liver disease. The incidence of liver disease has doubled in this country since 1995. I often wonder whether any of the representatives take any responsibility for that. Does it ever impact on them when they are sitting around having discussions with Horse Racing Ireland and everybody else the damage that the abuse of drink has on people not only in Irish society but generally? That is my question and I direct it to Mr. O'Brien. Does he have any responsibility for that? He is one of the major players in the Irish drinks market. What does his group do in terms of health promotion or helping those who are involved in trying to stem the flow in that respect? Irrespective of his statistics, the overall figure might be decreasing but that does not take form the reality that more and more people are suffering as a result of the abuse of drink. He can say that is their choice but the glamorous way in which drink sponsorship is presented goes a long way towards creating the scenario we are in. With the industry having been severely restricted in how it can present drink on television and the printed media, the better option for it is to present it in a glamorous way.

I am concerned as well about thresholds and I would like Mr. O'Brien to also answer this question. In view of the restrictive nature of the manner in which the industry presents drink, particularly in television advertisements, there was a certain age threshold that was supposed to be used by models. I believe that age threshold has been breached regularly. It has come down further and further to the point where it is now hitting those who are in their late teens and early 20s.

We have heard from Horse Racing Ireland about all the money that is being put into the industry, how important it is and that it would be terrible if a race such as the Hennessy Gold Cup were to be lost. Any of the representatives who are involved in commercial sponsorship will know that branding constantly changes. One of the most popular games in the world is soccer and the premiership in England changes its sponsorship regularly. Other premiership national leagues across Europe and the world regularly change their sponsorship. In Ireland, the League of Ireland changes its sponsorship. I do not know what is the problem in that regard. If that race is not going to be called the Hennessy Gold Cup, it would be called something else.

The figure of €35 million in respect of sponsorship was mentioned. Does that figure represent the totality from sponsorship in sport in Ireland or only the sponsorship accruing from the drinks industry?

I do not want to single out Horse Racing Ireland but I would agree with Mr. Peter O'Brien that of all the sporting activities, horse racing is probably the one that I would be least concerned about in terms of health impact from sponsorship. Would I be right in saying that Horse Racing Ireland does not have any great difficulty in getting sponsorship, that people would be queuing up to offer sponsorship because it is a branded product? I refer particularly to many of the multinationals, that are of a non-drink nature, as it were, that have located in this country in recent years. Is there any doubt in his mind that the group will not continue to get drink sponsorship given that those multinationals see it as one of the very few areas where they can promote their products?

Tom Hayes (Tipperary South, Fine Gael)
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Thank you, Senator.

Paschal Mooney (Fianna Fail)
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I could continue, but my primary purpose in raising these issues is that I would like to know from all of the representatives, particularly those from the drinks industry, if they have any responsibility in terms of the impact the abuse of their product has on a growing number of young people.

Tom Hayes (Tipperary South, Fine Gael)
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I call Deputy O'Mahony.

John O'Mahony (Mayo, Fine Gael)
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I thank all the representatives for their presentations which were particularly well made. Mr. Brian Kavanagh's point on the digital age and the difficulty, if drinks sponsorship was banned in Ireland, of controlling visual images from events abroad which sponsor drinks was well made. In other words, would it be implementable? There are some issues to which I would like the representatives to respond. We had psychiatrists before the committee last week who would take a totally opposite view on this from that of the representatives. I ask them to respond to one of the comments that psychiatrists made. They said:

While common sense tells us that sponsorship promotes consumption, with typical arrogance the alcohol industry, and those in receipt of its money, demand that we provide them with the evidence that it does. It is this multi-billion euro industry that should be required to provide proof, if they have proof that alcohol sponsorship does nothing to increase alcohol-related harm.

Another point the psychiatrists strongly made was that over the years the drinks companies have infiltrated sport and now have control of it and that sport cannot shake itself free from them. I would be interested to hear the representatives response to that comment. The psychiatrists also made the point that millions of euro is being spent in our health service to treat people who are addicted to drink. They also made the point that children and young people involved in sport become very brand aware as a result of sponsorship. In other words, sport is used as the vehicle to make them brand aware at a very young age.

I would like Mr. Brian Kavanagh to respond to a further point. I asked the representatives of the GAA, rugby and soccer when they appeared before the committee about the presence of drink being consumed by those in the crowd during an event, be it big matches being played in the Aviva Stadium, Croke Park or elsewhere. The GAA bans people from bringing drink onto the terraces while the IRFU does not. It presents an awful sight to see somebody with a pint of larger in a plastic container in their hands as the event is going on. I would like to ask Mr. Brian Kavanagh about Horse Racing Ireland's policy on that at race courses - such as at Punchestown at the moment - around the country. How is the consumption of drink portrayed at race courses? Are children at race meetings allowed to wander in and out and are they being exposed to all of this or what prevention or education systems does it have in place? Does it use some of the money it get from the drinks industry to educate people to behave responsibly with regard to drink?

Tom Hayes (Tipperary South, Fine Gael)
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Who will take those questions?

Mr. Brian Kavanagh:

I will.

Tom Hayes (Tipperary South, Fine Gael)
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Mr. Brian Kavanagh will begin and some of the questions were directed to him.

Mr. Brian Kavanagh:

I will address those issues as best I can. Unfortunately, "No" is the answer to Senator Mooney's question on whether we will be easily able to replace these sponsors with other sponsors.

John O'Mahony (Mayo, Fine Gael)
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Through the Chair, I presume alcohol sponsorship is banned in France. What is the position with racing there?

Mr. Brian Kavanagh:

I am not aware of the situation in France. Alcohol sponsorship is not banned in the United Kingdom. I recall sponsorship by champagne companies in France but I am not aware of the current situation.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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It is banned in France.

Mr. Brian Kavanagh:

Yes, but racing is now a global business and the Irish racing fan is as tuned into the Australian form and the American form as they are into the Irish form.

Paschal Mooney (Fianna Fail)
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The Heineken Cup is banned in France.

Tom Hayes (Tipperary South, Fine Gael)
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Does the Government sponsor racing in France? Does that put pressure on this country?

Mr. Brian Kavanagh:

France has a different funding system. It does not have bookmakers. It has a tote monopoly. Effectively, all the profits of the betting industry are routed back into horse racing and trotting racing in France.

Tom Hayes (Tipperary South, Fine Gael)
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Yes.

Mr. Brian Kavanagh:

France does not have a bookmaking sector. With regard to the issues on the ground at race meetings, race courses are very responsible in that respect and very aware of working with the drinks companies to operate a code of practice at race meetings. They are different from other events described in that people typically go to a race meeting for five to six hours. That is different when compared to a GAA match or a football match. One would have to take the couple of hours before the match and after the match into account in comparing the timeframe between racing and other sports. Race courses operate in a regulated manner according to codes of conduct. Yesterday was a perfect example. Race meetings are convivial, good natured events. They are a good example of how to drink responsibly. Race courses are extremely conscious of their responsibilities in that respect.

Mr. Peter O'Brien:

We take our responsibility very seriously. Everyone in our industry is also a parent and someone who knows the reality of the world we live in. We are incredibly responsible in how we advertise. I wish to deal directly with the point about age. The Chairman is wrong. Every single person in an advertisement for alcohol in this country is over the age of 25, not just because their passport says it but because they look over the age of 25. We have some of the most restrictive rules. The suggestion that anyone in those advertisements is in any way appealing to teenagers is simply incorrect. They are the rules we agree with the Department of Health and they are religiously enforced. Nobody can advertise alcohol to an audience that has more than 25% under the age of 18. The reality is that it is much more like approximately 15%. Of course underage people get access to everything in life. That is the reality of the world we live in, but it is simply incorrect to say that there is any targeting of anybody under the legal drinking age.

In response to Deputy O’Mahony, on the direct quote last week about consumption, I can only repeat again, there is no wine sponsorship in this country yet consumption is up 13%. There is significant beer sponsorship in this country and consumption is down 9%. The reality is that there is no correlation between sponsorship and alcohol misuse. What we want to do in beer sponsorship is ask one to drink one type of pint rather than another. That is what we do, and that is the reality of the world we live in. Consumption has declined by 19%. The situation is clear.

On the point about France, as people have said, there is a ban and teenage drinking is on the increase according to a European report. It is declining in Ireland and increasing in France. Once again, there is no correlation between sponsorship and misuse. We must deal with misuse. The point we are making today is that the lever of sponsorship is not one that will impact in any way on dealing with the problem.

Paschal Mooney (Fianna Fail)
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My question was glossed over. I asked whether the drinks companies are providing any financial resources to those who work in the health sector. Every time the argument is put forward about the amount of money that is paid in sponsorship and what it then generates for the economy it completely ignores the elephant in the room of the amount of money with which the State is burdened as a result of the health implications of the abuse of alcohol and smoking as well.

Mr. Peter O'Brien:

There is a whole series of health issues associated with the abuse of many things – everything from obesity to alcohol problems. The drinks industry funds entirely the website drinkaware.ie. It is recognised as the best website providing an approach to responsible drinking. We are the only people who do it. Nobody else does it. In the past five years the programme has cost €20 million. It is beginning to work. We want physicians and psychiatrists to work with us and show us how to improve the website. We are the only ones who are spending the money to educate people about alcohol. People might say we do not have a right to do it. They are welcome to join us and to make it better.

Ms Sarah O'Shea:

I wish to respond to Senator Mooney’s comment about glamorous events with the alcohol industry and sport. It is not a question of glamour for sport; it is a question of funding. The three big sporting organisations, namely, the GAA, the FAI and the IRFU made it clear that if a ban on this category of sponsorship is introduced it would have a significant knock-on effect for many social programmes that are run for sports. It is not about glamour; it is about funding for sport. It is an important differentiation to make.

Paschal Mooney (Fianna Fail)
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I referred to the manner in which the drinks industry presents its products.

Tom Hayes (Tipperary South, Fine Gael)
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We will move on.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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I thank the witnesses for their presentation. I will be upfront. I think there should be a total ban on alcohol advertising in sport or any other area. I listened to the arguments in recent weeks and what I heard from the medical profession in particular last week hammered home for me that we cannot continue with alcohol sponsorship. The witnesses outlined the benefits but it does not add up when one takes the cost into account.

I am concerned that people representing sporting organisations sound like they are part of the drinks industry. It is important that the Federation of Irish Sport clear up the situation. If an alternative funding stream is found I hope the sporting organisations would be delighted to move away from the alcohol industry. The issue of concern is funding and it should not be the case that the organisations are so dependent on the funding they receive that they have to justify advertising alcohol, which according to the medical profession is a bad thing. I am a little bemused as to why anyone would think that the medical profession has an ulterior motive. The medical profession has only one motive, namely, people’s health. It presented us with the facts. It has no vested interest in anything other than health.

Does alcohol advertising bring so much to Irish sport that we cannot do without it? I accept it provides approximately €35 million in sponsorship. Could the €1 million that is put into horse racing not be replaced with another source of funding? If I am correct, it was mentioned that €2 billion was paid in taxes by the alcohol industry. We are making a loss then because alcohol abuse costs €3.4 billion. The industry might well contribute €2 billion in taxes but it takes €3.4 billion out. We must find an alternative source of funding given that the medical experts have proven that it is a negative thing to have alcohol advertising and the sporting organisations require funding. We could consider an increase in taxation on alcohol. We have been told that the drinks industry pay €2 billion in tax. If we increase that by 2.5% it will pay an extra €50 million. If we give that to sports in whatever way the Government wants to divvy it out one will have filled the gap.

Eamonn Coghlan (Independent)
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I welcome the witnesses, whom I have met at various times over the years. I was disappointed to hear that Lonely Planet highlighted going to the pub as the greatest experience for a tourist visiting Ireland. I always thought my American friends enjoyed the Blarney Stone more than anything else.

I disagree with Deputy Flanagan. I believe sport is being hung out to dry in this case. If there is to be a total ban on alcohol sponsorship in sport, do we include music, the arts and festivals-----

Luke Flanagan (Roscommon-South Leitrim, Independent)
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I said all-----

Eamonn Coghlan (Independent)
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-----as well as billboards and television? Deputy Flanagan should know-----

Tom Hayes (Tipperary South, Fine Gael)
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I remind the members that this is not a debate. Please put questions to the witnesses.

Eamonn Coghlan (Independent)
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As a young boy I used to use the Guinness pool, which helped to promote swimming. I used to go to the Iveagh Grounds, which was and still is sponsored by Guinness. I have only had one pint of Guinness in my life, and I was never influenced by Guinness's association with sports.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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Has the Senator done a scientific study?

Eamonn Coghlan (Independent)
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The night before I won world championships and broke world records I had a pint going to bed and I was able to run 20 miles the next morning.

This question may have been asked and answered, but why do alcohol companies sponsor sports? What is the most important aspect of the witnesses' association with sports sponsorship? Is it the winning, brand awareness or their community contribution?

Senator Mooney referred to the recent report on the misuse of alcohol and the number of people suffering from liver disease and so on. Has a survey ever been done on the number of people participating in sports and the way in which alcohol has affected them? I believe it is the people who are not participating in sports who most abuse alcohol. Has any survey been done of those participating in sports compared to those who do not participate?

Tom Fleming (Kerry South, Independent)
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I welcome the delegation. I listened earlier to the contributions from the director of strategy and the chief executive officer of Horse Racing Ireland. The experience of anybody attending a race meeting is that the bar and entertainment side of it is run in a responsible manner. There is good control and it is held in a good environment. It is part of the experience of attending a race meeting. I have seen that in other stadiums - for example, Croke Park and the Aviva - where I have witnessed people enjoying themselves in what I would describe as a normal situation.

Mention was made of Lonely Planet. That is factual, because a visit to a typical Irish pub is a major part of our tourism industry.

Tom Hayes (Tipperary South, Fine Gael)
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A vote has been called in the Dáil and I ask the Deputy to be brief.

Tom Fleming (Kerry South, Independent)
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We need balance in this debate. As Senator Coghlan remarked, is the intention to ban alcohol advertising in the arts and music? Will it be a blanket ban across the board? We must come to a proper decision in this matter that will be acceptable to everybody concerned because we are reliant on that sponsorship, particularly in traditional industries such as the racing industry.

Ten percent of the drinks companies' revenue is expended on advertising. We should take 10% of that, and of the sponsorship given to all organisations, and put it towards highlighting responsible drinking. We should target the youth in that regard, particularly in terms of eradicating binge drinking. I believe a system can be devised that would keep everybody happy.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I thank the witnesses for attending. I think it was Mr. O'Brien who said we need to identify the problem before designing the solution. The problem has been identified and quantified. What we are struggling with is a solution. I understand that a sudden unilateral withdrawal of sponsorship of sports would have a major impact on sports if it were not replaced with sponsorship from some other source.

Regarding the low-cost crates of beer one can buy in SuperValu, Tesco and so on, does the drinks industry cut a special deal with supermarkets to facilitate them in below-cost selling?

Tom Hayes (Tipperary South, Fine Gael)
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That is a question for somebody else.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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It is peripheral for this committee but I believe it is part of the solution.

Tom Hayes (Tipperary South, Fine Gael)
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Those questions should be addressed to people in the drinks industry.

Mr. Peter O'Brien:

If I may reply, Deputy Flanagan-----

Tom Hayes (Tipperary South, Fine Gael)
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We are tight for time because a vote has been called in the Dáil.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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Can we vote in the Dáil and return to hear the answers?

Tom Hayes (Tipperary South, Fine Gael)
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Do we need to come back? We have been through the-----

Luke Flanagan (Roscommon-South Leitrim, Independent)
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I certainly want to come back because I want to hear the witnesses' responses to my contribution. That is the reason I came here this morning. I am sorry if that inconveniences anyone.

Mr. Peter O'Brien:

We are available all day.

Tom Hayes (Tipperary South, Fine Gael)
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I will go straight back to our guest, Mr. Peter O'Brien.

Mr. Peter O'Brien:

I will respond to the points made by Deputy 'Ming' Flanagan. We share the concerns of the health lobby on the health issues. We take our responsibilities very seriously. Let me repeat, the members of the drinks industry are the only people who are educating people on alcohol in this country. We invite all the health professionals, parliamentarians and officials from the Departments of Health and Children and Youth Affairs to join us. The simple reality is that there is no relationship between sponsorship and consumption. We agree that public health is an issue. The question is what will make most impact on public health. The reality is that education, awareness and enforcement will impact on public health. We want to support that.

I will ask my colleague, Mr. Donall O'Keeffe - the representative from the publicans - to address the Deputy's specific question on taxation.

Mr. Donall O'Keeffe:

I wish to address the two points, sponsorship and taxation. We see no relation between sponsorship and consumption on the ground, for example when the Heineken Cup is on, we do not see people drinking enormous quantities of Heineken. When the Power Gold Cup National Hunt chase is on, people are not binge drinking Powers Whiskey. When an event is sponsored by the Drinks Industry, it is the event that is important to the trade, consumption is the person's choice.

Ireland is among the very highest taxed European alcohol economies. We have had enormously high levels of alcohol taxation for 15 to 20 years and further increasing alcohol taxes, namely excise, has the singular effect of hurting the pub trade, costing jobs in the pub trade and making no impact whatsoever on the abuse of alcohol.

Ms Sarah O'Connor:

Deputy Flanagan made the point about funding for sport. There is no alternative funding available to us at present. This is a key issue. If Deputy Flanagan is aware of other funding on the table or that may come on the table, I think sport will be more than willing to listen to that.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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What I have suggested is that the Federation of Irish Sport be funded by the Government through a levy on the alcohol industry. Surely that would be appealing, given that the Federation of Irish Sport is trying to promote sport.

Ms Sarah O'Connor:

All additional sources of income will be welcome. We have been trying to make the point to Government-----

Luke Flanagan (Roscommon-South Leitrim, Independent)
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I was not referring to additional income, but a substitute for what I believe is a matter that has a corrosive effect on sport.

Ms Sarah O'Connor:

We need to look at where our sports funding has gone. Funding for the Sports Council, which funds more than 100 bodies and our elite athletes has been reduced from €311 million to just €54 million in the current year.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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If one could get funding from another source, that was not alcohol based, surely Ms O'Connor would be pleased?

Ms Sarah O'Connor:

We would be pleased.

Tom Hayes (Tipperary South, Fine Gael)
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Before people comment further, may I remind witnesses and members that all comments should be addressed through the Chair, which must be fair to everybody.

Ms Sarah O'Connor:

As the representatives from the major three field sports reiterated, sport is always open to listening to other offers of funding that may be on the table. In the current environment funding is key and there is no direct replacement.

Mr. Peter O'Brien:

On the issue of taxation, there is a very direct consequence of what the Deputy is asking. We have the fifth highest level of taxation on excise. If the Deputy wants to increase taxation from €2 billion to €2.5 billion, it will have a direct impact. One will be to reduce the numbers of people working in pubs throughout the length and breadth of the country. Companies will stop investing in Ireland and will make less profits. When companies in Ireland make less profits and let us take the example of Guinness, it will not spend the €170 million on the Guinness Brewery in Dublin. We will not spend the money on the Midleton Distillery in Cork, that is the reality. We are in business. We are proud of the fact that we make money and invest it in the economy. We create jobs, investment and exports. That is what the Deputy's suggestion will impact on.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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I would have a concern if I suggested increasing taxation by €500 million, but I did not. I suggested that it be increased from €2 billion to €2050 million. Mr. O'Brien must have misheard me.

Mr. Peter O'Brien:

Through the Chair, I obviously did mishear Deputy 'Ming' Flanagan. I apologise for that. My mathematics were clearly wrong. The simple fact is that Ireland has the fifth highest level of taxation. It will have a massive impact on jobs in the hospitality sector in Ireland. Hospitality is one of the highest employers of young people and that will be the impact of increased taxation.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I asked a question on below cost selling in supermarkets. Is there a special deal done between the drinks' companies and the supermarkets?

Mr. Peter O'Brien:

The answer is "No". The simple fact is that supermarkets set the price of alcohol. The retailers set the price of alcohol and we do not represent the supermarkets The supermarkets are one element of the wider drinks family that is not represented here today. The Deputy must ask the retailers to answer that particular question.

To address the issue of 10%, we talked about a €35 million to €40 million. We spend €4 million a year on Drink Aware, which is exactly what he asked for, 10%. The drinks industry is spending a proportion of its money on drink awareness. That does not take account of all of the responsible drinking activity that takes place at the individual sporting events that have been highlighted by the sporting organisations. I think we play a very responsible role.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Chairman, I think it was Deputy 'Ming' Flanagan who asked about the 10%.

Mr. Peter O'Brien:

I beg the pardon of the Chairman. It was Deputy 'Ming' Flanagan

Luke Flanagan (Roscommon-South Leitrim, Independent)
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It is fairly clear that it is not a level playing field if one is spending €35 million encouraging people to go for a particular type of drink and one is spending only €4 million on trying to discourage them, it is fairly clear who will win there, just sit on a see saw and put 40 on one side and 4 on the other, one will see what way it tips.

Mr. Peter O'Brien:

Chairman, without repeating myself, consumption in Ireland is down by 19%. It is a very complicated subject. Making simple mathematical equations like that does not really do anything. The fact of the matter is that we play our role in DrinkAware.ie. I call on health professional, government and every other person to play their role in education. This is a long-term issue.

Luke Flanagan (Roscommon-South Leitrim, Independent)
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It is highly insulting to say the reason someone would want to ban alcohol advertising is because he does not understand the arguments. It is not that complicated; it is quite easy to understand. Mr. O'Brien may believe the matter is complicated and that it is not understood but my analysis is that alcohol advertising should be banned. Mr. O'Brien would obviously say otherwise.

Tom Hayes (Tipperary South, Fine Gael)
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We have heard submissions from the various bodies over the course of three meetings and we have taken them all into account. The next step is for the committee to draw up a short report and present it to the Minister. I thank everyone who participated in this quite interesting and worthwhile exercise.

At 9.30 a.m. on Wednesday, 1 May 2013, we will be meeting the new chairman of An Post, Mr. Christoph Mueller.