Brew boo-hoo: Beer sales are slumping
Analysts say the payroll tax hike and high unemployment among young men are to blame for a 2.6% slide this year.
Here are some statistics that give a whole new meaning to trickle-down economics. Researchers say lighter paychecks and more young men out of work added up to a decline in U.S. beer sales for the first half of this year.
In a newly released note quoted by CNBC, analysts at Berstein Research said overall beer sales fell by 3% during the first three months of 2013 and are down 2.6% for the year so far.
"We believe that there has been a deterioration in the economic well-being of the lower income consumer," the note said, "with the pay-roll tax hike having taken its toll and a marked up-tick in unemployment among young men."
Bernstein said it expects less suds to be sold across the country in the third quarter of 2013 as well, but it believes the decline is "diminishing in magnitude" as the economy improves and young male consumers get a bit more beer money.
In the meantime, though, a lot of beer companies are taking a financial hit. According to CNBC, sales of brands from MillerCoors -- a joint venture between Molson Coors (TAP) and SABMiller (SBMRY) -- fell 4% in the second quarter, while Anheuser-Busch InBev (BUD) reported a 3.3% decline during the same time period.
"Across the country, beer volumes were challenged ... due to a combination of tough comparatives led by last year's unseasonably warm weather and the payroll tax increase that impacted our core beer drinkers' disposable income," MillerCoors CEO Tom Long said in May, after reporting a 1.2% decline in first-quarter income. But Long added there was "reason for optimism" as new brands, including Redd's Apple Ale and Third Shift, catch on with consumers and retailers.
Researchers at Nielsen report a large percentage of consumers say they're staying home more now, compared to before the recession. The Nielsen data, released last month, also showed more than two-thirds of beer drinkers say they're finding good brews at lower costs.
I'm with you mikencyb,
Someone needs to make up for the shortfall, and I'm willing to sacrifice for this cause.
Great news. Now, maybe the beer prices will return to a sensible price..
And, have you noticed that the Beer retailers will always blame the distributors for the ever-rising prices?
I gave beer up a few years ago, I used to work for Bud on top of that. They are like the gas company's. They get what they can, for they can. Bud sets the price point every year and then Coors follows their lead, but usually get creative to be lower. A month later Bud gives in and matches Coors prices, but it is still higher than the year before.. Beer is the drink for the middle class, and the middle class is getting to the point like myself to drink less or not at all due to price.
The large box stores believe it or not sell the beer very close to what it cost them, on major weekends they sell it below cost as a lost leader and gain additional customer traffic. The only people that benefit are the brewers and distributors, come on Beer is 95% water! Who is making the Killing, Has the Race Teams, NFL, the huge promotions, Sponsors Major events (Super Bowl) I understand that is in the 100's of Millions for one event. I can go on and on..... It's another bad business.
Beer is good... Beer is good... Beer is good... and stuff!
Let's go drink some BEER!
...but we love to run commercials to tempt them to blow money they desperately need at home on our beer and are disappointed they're not keeping up with their boozing!
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