Published: Friday, January 23, 2009
Canadians are coping with the economic downturn one pint at a time, if national sales of alcoholic beverages are any indication.
Although fourth-quarter data won't be available until April, a Statistics Canada snapshot of unadjusted sales by large retailers' liquor stores - including those operated by Canada Safeway, Loblaw Companies and Costco Wholesale - shows booze buying is up 17 per cent this October over October 2007. Historical data from the agency reveals a similar alcoholic beverage spike during the 1982 recession, when national year-over-year sales climbed 16 per cent compared to an average increase of nine per cent in the five years prior and seven per cent in the five years following.
"During recessions, you see a reduction in casual alcohol use but a distinctive increase in abusive drinking," says Thomas S. Dee, a professor of economics at Swarthmore College in Pennsylvania. In 2001, he published a 740,000-person study in the journal Health Economics that revealed a five percentage point increase in the unemployment rate increases the probability of binge drinking by eight per cent.
Dave Harrop of West Coast U Brew pours a glass of two-year-old wine. 'Since this recession has hit, our industry has gotten a nice kick in the pants.'
"If you look at who's drinking more, it's not people who are unemployed; it's people who have maintained their attachment to the labour force," says Dee. "They're seeing people around them laid off, they're seeing reductions in their hours or wages, and they're worried about making ends meet."
Statistics Canada analyst Ruth Barnes says the 17 per cent year-over-year rise in sales by large retailers' liquor stores offers only a small snapshot of fourth-quarter performance by the industry, the full extent of which won't be known for a few months. Euromonitor International is also painting a picture of a recession-resistant category, noting that alcohol sales by volume in Canada made stronger gains in 2008 than in 2007 - with even more expected for 2009.
"On the whole, the industry is expecting good demand for alcoholic beverages in the coming years," says Svetlana Uduslivaia, a Montreal-based research analyst for global market research firm Euromonitor International. Manitoba, perhaps as a harbinger, recently set a record for single-day alcohol sales, moving $3.6 million worth of booze in less than 24 hours.