As alcohol prices spike, drinkers don't seem to care

Diageo and Anheuser-Busch say they've raised prices this year, which hasn't kept Americans from slinging back the drinks.

By Aimee Picchi Aug 1, 2013 1:59PM

Woman holding martini cocktail at a bar (© mediaphotos/E+/Getty Images)Americans may finally have an explanation for the $100 margarita.


Smirnoff Vodka owner Diageo (DEOboosted the price on its "super premium" scotch by 9%, reports Bloomberg Businessweek, citing comments from a Wednesday conference call. Drinkers also paid 10% more for Popov vodka and 7% more for Gordon's Gin. 


Given that North America represents 40% of Diageo's profit but only one-third of sales, that indicates that Americans are buying more premium liquors, such as Johnnie Walker Blue Label, which can cost $200 per bottle. 


Anheuser-Busch InBev (BUD) saw a similar pattern of consumers opting for pricier brands, although sales by volume at the world's largest brewer slipped 1.2% in the second quarter, the story noted. Yet revenue rose 3.9%, after the company raised beer prices last year.


Anheuser-Busch's earnings report hid a troubling trend for the brewer: the preference for higher-end drinks came at the expense of mainstream beer. No wonder AB InBev has been promoting its more expensive beers, such as Budweiser Black Crown. 


That brew, which made a Super Bowl advertising debut earlier this year, costs about $7.99 for a six pack, compared with about $6.59 for regular Budweiser. 


The trend raises the question of whether the relatively high unemployment rate for young adult men is eating into their beer money. The jobless rate for men between 20 to 24 years old stood at 15% in June, almost double the country's 7.6% rate, according to the U.S. Department of Labor. 


But for those living high on the hog, witness the "Winston," which in February set a Guinness World Record for the most expensive cocktail. Selling for almost $13,000, the drink included 1858 Croizet cognac ($6,000 per shot), as well as some Grand Marnier Quintessence ($800 per bottle) and chocolate nutmeg dust. 


Follow Aimee Picchi on Twitter at @aimeepicchi.


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24Comments
Aug 1, 2013 3:21PM
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But the gov't says there is no inflation. I guess the liquor importers are just price gouging instead. They must know the economy is improving and the sheeple can afford the higher prices. When will Americans learn we are being fleeced by our own gov't by fascism and there is no end in sight
Aug 2, 2013 1:26AM
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My arms are so sore from the "government" twisting them, forcing me to drink, thereby spending more money when liquor prices go up! Yeah, right.
Aug 5, 2013 5:49AM
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Booze, Beef & Broads
Their all expensive.
But well worth the price.
Aug 5, 2013 11:52AM
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Just wait till the whole nation legalizes weed. The tax on it will be fantastic for the government. Too bad they are too stupid to go with the flow.
Aug 5, 2013 11:48AM
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How many programs are being funded by taxes on alcohol?  The initial cost is probably not that much, but by the time the states put their tax on for schools, new sports stadiums. etc., the cost goes high.  Before it was tobacco and as more and more quit smoking, the revenue has to come from somewhere.  If people quit smoking, the taxes will need to be generated from another source like, food and gas.
Aug 5, 2013 1:45PM
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Gotta love people who pay for premium booze in mixed drinks.  Good quality is one thing but over-the-top expensive in a mixed drink is just crazy showing off.
Aug 1, 2013 3:46PM
Aug 1, 2013 8:24PM
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Smirnoff doesn't have a premium brand, it's swill.
Aug 1, 2013 3:51PM
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AND their filling premium brand liquor with cheap alcohol!

Aug 2, 2013 10:44AM
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That much is rarely too much when you're getting your drink on.

Aug 1, 2013 11:42PM
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Say did you all hear about the Pabst blue ribbon girl she came home with Schlitz in her pants Budweiser.
Aug 5, 2013 3:33PM
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premiums may be going up, but the cheap stuff isn't going up.
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If the alcohol industry was taxed like tobacco..there would be some serious bitchin take place.
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I'll have a cold draft with a side order of titties please..............
Aug 5, 2013 7:19PM
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There's one reason alcohol is so expensive. Because the alcohol industry is the first thing politicians go after when they want to raise or implement more taxes. So next time you wonder why that martini is $15 or $20, write your sh*thead politicians and thank them. Contrary to what most people think, most bars run a very tight profit margin. That's why you see so many of them go out of business not too long after they open. Of course, it would make much more sense to tax church businesses, than to raise taxes on alcohol, but you'll never find a politician who has the balls to suggest that we do that.
Aug 1, 2013 4:00PM
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Johnnie Walker Blue in PA-
Johnnie Walker Blue Label Scotch
750 ML
80 231.99
  Regular
Spirit SCOTCH WHISKEY
more than $200. by a just a tad.

Aug 5, 2013 4:39PM
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just have to let that new stove and frig go to someone else im not going with out fun in my live
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