Cheers! We’re in a recession!
With the country still suffering the hangover of Wall Street excess (as former President George Bush said last year), the hair of the dog that bit seems both elusive and desirable.
Although many area businesses continue to suffer to varying degrees from the effects of that hangover — local and national economies in decline — one industry appears immune to the current recession: alcohol sales.
In fact, while almost all sectors of the economy report a decrease in business, alcohol sales appear to remain brisk — albeit, with lower-end brands leading the pack.
“Where someone would be willing to pay $11 for a glass of wine,” said Ashley Addington, distributor for Southern Wine and Spirits, a company servicing local bars and restaurants, “now, it’s in the $7 range.”
Addington added that, while so-called top-shelf (or “back bar”) sales are down, cheaper brands (or “well”) are more than making up for the decline.
“What I’m seeing with bar and restaurant customers, the ratio of well to back bar items is a case of well to two bottles of top shelf, where it used to be eight to ten back bar items to every case of well.”
Addington’s assessment is on course with what other local distributors, bars and liquor stores are saying.
Jay Schissler, whose company Republic National Distributors services liquor stores as well as bars and restaurants, says that, “The bar business is a bit down but liquor store sales are steady. People are drinking at home more.”
Mark Stauth, owner of the Bear Creek Saloon, agrees with Schissler. “My food sales are down but my liquor sales are pretty much on track.”
According to Stauth, customers are tending to order cheaper brands and, though drinking more, faster, tend to leave for a quick stop at the liquor store before heading home.
“It’s a cheap form of entertainment,” he said, “and, when people are out of work or hurting economically, drinking can be a way to escape.”
Denise Mudroch, manager of the Mountain Spirits liquor store would not disagree that Pagosa area residents are picking up their entertainment in her store and taking it home.
“Sales are pretty much the same as they’ve been,” she said, adding that sales are down on higher-priced items. “The trend has gone towards inexpensive vodka and wine. We’re selling a lot of box wine.”
Schissler knows the pain of not moving higher-priced wine, saying, “This area used to be good for Cristal and Dom Perignon, but now it’s just sitting on the shelves.”
“They’re buying more sale items,” Addington said, agreeing with Schissler and Mudroch, “especially if I have a sale on wine, people jump on it. They want more in the bottle for less.”
In fact, Gomberg, Fredrikson & Associate, a California company that tracks wine sales, reports that wine drinkers have been trending towards value wines this year, with large wineries (who provide the bulk of inexpensive wines) doing record business while smaller, boutique wineries are suffering as consumers move away from higher-priced brands.
With the Pagosa area following national trends economically, the area appears to be on track with national drinking trends as well. John Betka, General Manager for the A&L Coors, said that sales in the area are steady, but sales volume is up — an observation made by all distributors interviewed for this report.
“That’s pretty much the way it is, nationally,” he said. “I participated in a survey of 18 national wholesalers and they’re all saying the same thing.”
“This is a recession-proof industry,” he said. “I feel fortunate.”
Unfortunately, more drinking can mean more drinking problems, a condition borne out by local drug and alcohol counselor Katherine Nelson. “I have noticed an increase in alcohol related incidents in the past few months,” she said.
In fact, Bart Plumbley, registered nurse and case manager at the Pagosa Mountain Hospital (PMH), when asked if the hospital had seen a rise in alcohol-related admissions, responded, “Absolutely. We have seen an increase in alcohol-related incidents.”
“We’ve always had our ‘frequent-flyers’ (meaning, drinkers with multiple admissions to the hospital for alcohol-related problems), but what we’re seeing are newcomers,” he said. “It’s not that they weren’t drinkers before, but we’re seeing more of them coming in on alcohol-related incidents and those incidents have to do with them dealing with home loss, family loss, and job loss.
“Along with that, we’re seeing more suicidal ideation and that’s basically related to what’s going on in the economy.”
Plumbley added that PMH had 4,595 admissions last year, of which 65 (or 1.41 percent) were alcohol related or the primary diagnosis. This year, with 20 alcohol-related incidents from 1,820 total admissions, that percentage jumps to 2.18-percent — a 77-percent rise in alcohol-related admissions.
While use and abuse of alcohol may be up (or at least, consistent) in Archuleta County, problems related to drinking have clearly risen.
How other so-called “vices” fare during tough economic times remains questionable. Contrary to conventional wisdom, gambling does not appear to be recession-proof. Kristen Shew, communications manager for the Colorado Lottery reports that, while Lotto sales are up 6 percent and Cash 5 sales are up 8.7 percent (for a record year), Powerball sales are down 7.3 percent and scratch tickets are down 2.1 percent, putting lottery sales down 2.1 percent in 2009 — $10.6 million from last year at this time.
Likewise, The Colorado Department of Revenue, Division of Gaming reports that casino sales have shown a steady decline in 2009, with a 12.1-percent drop year to date and down 12.3 percent from the same month last year.
Apparently, Colorado and Archuleta County residents have determined where their money is better spent.
If, as was reported in last week’s edition of The SUN, the population of Archuleta County has likely decreased over the last year, steady alcohol sales would actually indicate an increase of alcohol purchases — and use — by local residents. With key indicators (diminishing sales tax revenues, declining school enrollment and increasing home sale listings) suggesting a decline in area population, steady sales of alcohol would, Q.E.D., indicate increased use.
With economic analysts providing no clear prognosis for the end of a national hangover, it is clear that area residents have taken the advice of the ancient Greek physician Paracelsus to heart: “A little bit of beer is divine medicine.”