As economy flops, alcohol sales soar

As the old saying goes, “When the going gets tough, the tough get drinking.”

Well, not exactly.

But with today’s economy, the sentiment is becoming more of a reality every day.

As the stock market continues to fall and economic stability deteriorates, Americans are flocking to bars and liquor stores in record numbers. Studies have shown that throughout history, increased economic turmoil has resulted in a spike in alcohol sales.

It’s one of the oldest remedies known to man, and while people may not necessarily be able to afford a $30 bottle of Grey Goose, they are by no means cutting alcohol from their shopping list.

“If we’ve seen anything, it’s not less sales,” said Victor George, the owner of Stadium Market (in Ann Arbor, Mich.). “We’ve just been selling less expensive liquor.”

George said cheaper vodkas, like Smirnoff and Burnett’s, have been selling much better than the more expensive ones.

Liquor stores that attract a student clientele are experiencing a slight decrease in their alcohol sales, and while many factors could contribute to this opposite trend, tighter budgets could be an obvious explanation.

Last year in Pennsylvania, wine and liquor sales were reportedly up 4.7 percent.

Similarly, Connecticut reported that tax revenue on alcoholic beverages was up 4.7 percent for the fiscal year that ended last June.

The Division of Liquor Control for the Ohio Department of Commerce, as reported by the Ohio University Post, announced that alcohol sales grew $32.6 million from 2007 to 2008, an increase of 4.75 percent.

Alcohol companies across the country – especially wine companies – are also reporting sales are skyrocketing.

Brown-Forman, one of the largest American-owned wine companies, stated that its income has grown 4 percent in the second quarter this year. And Liquor Group Michigan, a liquor and wine distribution company, reported a 78 percent increase in wine case sales in Michigan for 2008.

The recent spike in alcohol sales as the nation’s economy falls into a tailspin is not unique, said (University of Michigan) economics professor John Bound.

In 1991, Bound said the collapse of the Soviet Union and the end of the Cold War directly resulted in soaring alcohol sales.

“Alcohol use went up dramatically in Russia after the fall of the Soviet Union,” Bound said.

London School of Hygiene and (University of Michigan) Tropical Medicine Prof. Martin McKee, in his journal article titled “Alcohol in Russia,” discussed the effects of the government’s collapse on alcohol consumption

With the collapse of the communist government, McKee said, there was a collapse of anti-alcohol campaigns, which resulted in heavy drinking across the country. There was even evidence that alcohol consumption levels in the 1990s far exceeded pre-Soviet Union levels.

This story was originally published on March 4 by the University of Michigan’s Michigan Daily. Content was made

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