As economy tanks, bar and liquor store owners report boom in alcohol sales

BY EMILY ORLEY
Daily Staff Reporter
Published March 4, 2009

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

Will Moeller/Daily
Tim Kramer, the home brew manager, checks a customer out at the Beer Depot on William Street Sunday March 8th, 2009.

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 — hitting lows that haven’t been seen since the mid-1990s — and economic stability deteriorates, Americans are flocking to bars and liquor stores in record numbers. Studies have shown that throughout history, in the United States and around the globe, increased economic turmoil has resulted in a spike in alcohol sales.

Many businesses in downtown Ann Arbor have reported an increase in alcohol sales recently, while some campus hot spots, however, have seen inverse effects.

“(Our sales) have been increasing since the economic situation started,” said Tim Kramer, manager of Beer Depot. “What do you think people run to? It’s easier to drink than go out.”

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. “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.

“(Students) are staying home and buying a case of beer from the corner store as opposed to going out and buying pitchers,” said an employee at Scorekeepers Sportsgrill & Pub, who asked to remain anonymous because he wasn’t authorized to speak for the company.

He said that at Scorekeeper’s, students just aren’t spending as much as they used to.

Eddie Gilyano, the manager of Strickland’s Market, a liquor store located on Geddes Avenue, said the store's alcohol sales have decreased significantly since the economy took a turn for the worse.

But just as campus areas are not representative of the rest of Ann Arbor, they are not representative of the rest of the country, which has technically been in a recession since Dec. 2007.

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 Economics Prof. 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 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.