Who’s down about the economy? (Hint: Not Diageo.)

With grain prices sky-high and the very integrity of the McDonald’s Dollar Menu in jeopardy, it’s no wonder that no one has had paid much attention to the handful of beneficiaries of the economic downturn: chief among them, the liquor industry.  Why is it doing so well?  Consider this: There’s no better accompaniment to an evening of tearing your hair out over your impending foreclosure/layoff/bankruptcy than a glass of perfectly aged, single malt Scotch — or better yet, a few of them.

All across the country, sales of alcohol — particularly spirits and wine — are up, up, up.  A June 2008 survey conducted by Nielsen shows that consumer attitudes towards spending on booze have changed little despite the failing economy.  At least a couple of states, including Iowa and Pennsylvania, have reported increased sales of alcoholic beverages in the last year of 5% or more.  (And perhaps as a sign of the times, South Carolina is considering repealing its Blue Laws and allowing restaurants to serve alcohol on Sundays.) Whereas today’s financially pinched shopper may see other, larger purchases as excessive, liquor is still seen as an affordable luxury for many. 

All of these gains may not be reflected in the current fortunes of some of the major, publicly-traded liquor companies.  French-owned vodka maker Belvedere filed for bankruptcy last month.  And then there’s Diageo, the mega-conglomerate that owns pretty much every major alcohol brand you can think of — go ahead, try: Smirnoff? Yep. Cuervo? Mmm-hmm.  Guinness?  Red Stripe?  Dom Perignon? All, yes.  Recent U.S. sales have been less than robust. But according to a recent Wall Street Journal article, neither the company — the world’s largest purveyor of booze — or the analysts who track it are worried about slowing sales as the country slips deeper into a depression.  In fact, they suggest that the company’s stock will quite possibly “rise sharply” in the next year.  Blind optimism or prescience?  We don’t know yet, but we’ll think about it over a cold one.

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