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Beer consumption steady despite national drop

BY MARY HARRINGTON | MARCH 2, 2009 7:30 AM

Iowa City drinkers may be upgrading rather than cutting down on beer consumption during an economic recession.

National alcohol sales dropped an unprecedented 9.3 percent during the last quarter of 2008, with a majority of the drop in beer, according to data from the Bureau of Economic Analysis. It was the first time in half a century that alcohol did not appear to be recession-proof.

Yet Iowa City seems to be immune to the booze decline.

Local liquor stores and grocery markets did not experience the nationwide trend in recent months, employees said.

“[Iowa City] is a college town, so it’s a relatively insulated community where the income of college students is not really going to change much at a time like this,” UI economics professor Gabriele Camera said.

Although the drop in drinks is not happening locally, a different trend seems to be sneaking up on some store shelves. Area distributors say cheap cases of domestic beers are sometimes getting neglected as locals shift towards higher quality brews when the option is available.

“Less but better is the trend right now,” said Doug Alberhasky, the “Bier Guy” and store manager at John’s Grocery, 401 E. Market St. “We’ve really seen our customers pushing us into the direction of the better stuff.”

Hy-Vee grocery stores in Johnson County are seeing another trend.

“There’s been a bit of a trade-up in beers,” said Jim Funcke, manager of Hy-Vee Wine and Spirits in Coralville. “People lately have been buying less beer but at a higher quality, and the people who were already inclined to the nicer brews are certainly not going to switch to a Miller High Life.”

Alberhasky stressed that people are catching on to the idea of fully enjoying the flavor of the alcoholic beverages they choose to spend their money on, especially when every cent counts.

So while some locals may be buying less beer, the upgrade to higher-quality brews evens out the costs, Alberhasky said. As a result, local business managers said incomes from alcohol sales since last year remain unchanged.

But with beer, the costs are typically much lower than other alcoholic choices, such as hard liquor and some wines, Funcke said.

Since the economy began to spiral downward, many local Hy-Vee shoppers have downgraded their liquor purchases, he said, and he has witnessed customers switch from Absolut vodka to cheaper varieties, such as Popoff, since the last quarter of 2008.

UI counselors stressed the steady alcohol sales during a recession do not necessarily point to signs of addiction. Rather, the numbers represent conscious decisions by individuals to make room for alcohol consumption in their budgets.

But Camera said he understands the national drop.

“Usually, something like alcohol is going to be one of the first items cut from a budget since it is more of a luxury than a necessity,” Camera said.

For now, though, it looks like beer will remain in the budgets and on the shopping lists of local drinkers.


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