How the Economy effects Beer Consumption

Pictures of disconsolate financial-sector workers stirring gloomily into their beer as the credit crunch swelled the ranks of the unemployed were spread recently over the pages of the UK’s national press. Unfortunately for the brewing industry, this is not a sign that even in times of global economic downturn, the man and woman on the street will always make room in the budget for their lager or ale.

Sadly, the indicators are that the mass belt-tightening exercise has been extended to curtailing visits to the local pub.

Witness a recent quarterly report from the British Pub & Beer Association, which made sobering reading for everyone connected with the industry. Not only were total beer sales down 4.5% on the same period the previous year, but pubs had been hit even harder, sales down 10.6%, with the total tax payout to the Treasury £88 million down on the equivalent figure for 2007. Ouch! If the chancellor of the exchequer’s beer has gone flat, then you know times are hard.

Glimmer Of Light

The one glimmer of light in the report is the increase in offtrade sales – supermarkets and shops – of 3.8%, underlining a discernible trend for consumers to buy-in beer to drink at home rather than head for the pub or café-bar. With multipacks prominent in both TV and press advertising commissioned by the major supermarkets, it is not surprising that the public has looked at the prices and decided they can get more beer for their money at the checkout.

Pub groups no doubt will point to the UK government’s increase in alcohol duty as a contributory factor in both the downturn in sales and the number of people visiting their establishments. These more traditional “watering holes” will also have been hit to a certain extent by the introduction in 2007 of the smoking ban. On the other hand, it may be that we are witnessing a change in the way large parts of society choose to enjoy beer – a domino effect (excuse the pun) that began with the perceived demise of the old-style boozer.

Batten Down The Hatches

But the fact remains that ultimately, the brewing industry, in common with many others, is simply going to have to wait for economic recovery – not so much down the hatch, more batten down the hatches – when consumers will feel more confident about spending more of their money on beer.

When the famous crash hit Wall Street in 1929, the prohibition of alcohol meant the United States was still dry. So if any disconsolate financial workers had wanted to stir gloomily into their beer, they would have been required to do it out of the range of the local police, never mind the long lenses of the press.

What the brewing industry is being forced to face up to now is something of a self-imposed prohibition on the part of Joe Public. In short, a drink is small beer when there are fuel bills to pay, and food to be put on the family table. The only consolation is that if and when economic fortunes begin to look brighter, there’s going to be one hell of a party.

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