Wednesday, April 27, 2011

British Beer Bummer

From Bloomberg:

U.K. drinkers bought 60.2 million fewer pints of beer in the first three months of 2011 as they cut back spending in shops and supermarkets, according to an industry group.

Beer purchases fell 3.8 percent to 5.32 million barrels from 5.52 million a year earlier, the British Beer and Pub Association said in an e-mailed statement. A barrel holds 164 liters of beer, or 288 pints, according to the London-based BBPA.

Sales in the “on-trade,” or in pubs and bars, slid 3.8 percent, the same rate of decline as at supermarkets and shops, or the “off-trade,” the BBPA said. On-trade sales declined at a slower pace than last year’s 8.8 percent decline, whereas shop sales fell from a 0.9 percent increase last year.

Beer sales “are still fragile,” Brigid Simmonds, the BBPA’s chief executive officer, said in the statement. Second- quarter sales may be helped by public holidays, including for the wedding of Prince William and Kate Middleton, and sunny weather, the BBPA said, even as beer prices rise due to a tax increase levied in this year’s U.K. budget.


Jeff Alworth said...

This actually touches on a point of economics: what part of these declines should one attribute to falling interest in beer, and what part to the British economy? The fact that both pub and grocery store sales are falling seems to indicate there's at least a mixture of the two--if not a preponderance of responsibility owing to the Cameron government.

Aside: I'd love to hear your thoughts on the British response to their financial woes as contrasted to the US's, all leavened by the question of whether this current austerity fixation in Washington threatens our fragile, half-assed recovery.

Patrick Emerson said...

Economics? What? Why would you come here looking for economics?

I think it is a combination of the economy, the beer tax, the price floors and the other large efforts made by the UK government to try and promote 'responsible drinking.' But it is also true that the culture is changing as well and pubs are closing rapidly as a result. In short, I have no good answers.

But keep in mind that their beer is largely craft beer and even beer sales in the US on whole are down - it is craft beer that is growing despite the overall trend.

As for the UK austerity - I think it is a mistake in the short-run and the evidence suggests that it is - so far. I think the US got it right with stimulus first then austerity later after the recovery has gained some steam. And yes, I think we need to be very careful about belt tightening too soon. Just look at Japan if you want to see the perils of austerity and recession.

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