The Drinks Industry Group of Ireland says 2008 was the worst year for the Irish drinks industry in 25 years.
DIGI predicts the economic downturn and the continuance of people buying alcohol in Northern Ireland could lead to the loss of 9,000 jobs in the industry in the next year.
The bulk of job losses are expected to come from pub trade, which accounts for 90% of jobs in the sector.
A report published by the group today claims the consumption of alcohol declined by 5.9% in 2008, with the largest fall in the consumption of cider down 11%.
It claims even given the large volume of alcohol bought in Northern Ireland and brought to the Republic, there is still a substantial fall in the amount of alcohol people are drinking.
Despite the fall in consumption, the alcohol market last year was still worth €6.9bn.
Drink prices in pubs increased by 4.2% last year compared to an increase of 2.2% on prices in off-licences.
The report also reveals that 52% of alcohol sales last year were made in off-licences, with sales in pubs and nightclubs down by as much as 9%.
Kieran Tobin of DIGI has called on the Government not to increase alcohol taxes in the supplementary budget.
He said doing so would do nothing to address alcohol misuse and would only serve to increase the rate of job losses and drive cross border buying.
He said alcohol taxes are unfair and regressive.
Economist Tony Foley of DCU, author of the report, said it is a miracle that off-licences in border areas are surviving at all given the volume of cross border alcohol buying.
He said that aspect of the industry will account for a lot of job losses in the coming year.
However, he said pub trade accounts for 90% of jobs in the sector and would be responsible for the bulk of job losses.
He said that alcohol purchase and consumption levels are now back to where they were in 1997 or 1998.
