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Beer on the Run

According to a small article by Nate Silver, the market for beer has gone down dramatically. During the fourth quarter of last year, sales of the delicious alcohol plummeted by nearly ten percent. Although percentage wise it does not seem like much, the fact that this statistic is so confounding is that since 1959, the worst percentage the beer industry has dropped is 3.7 percent. Although sales of wines and spirits went down during the last quarter as well, both only decreased by a much smaller margin, no bigger than two percent.

On top of alcohol sales, other valuable goods have decreased over the previous quarter. Jewelry and watches dropped over seven percent, the third largest drop ever recorded. Casino receipts have tumbled down eight and a half percent from last year, the biggest four quarter decrease ever. However, if one industry prevailed during the lavish fourth quarter, it would be the movie industry with a sales increase of almost 11 percent.
Of course the question still remains: Why does anyone care? So what if people aren’t spending their money getting drunk or bowing off their paycheck getting the big bucks. For beer at least, there has been a noticeable shortage of hops since 2007 which raises the price of beer in an era where the economy has gone belly up. Other people, like Silvers, think that drinkers have switched to imported beers like Alpha King or Dogfish Head, maybe as a result of being unpatriotic as Silvers argues. Imported beers such as these are known as microbrews which is a very cheap kind of beer. Basically, when the economy goes down like it has for the past few months, luxury items like beer or jewelry and watches become less desirable and cheap stuff like the microbrews have increases in sales. One could suppose that movies continue to rise is that it’s still a cheap way to get entertainment. People can go to new movies that cost as much as two dollars.
Many believe that this has to do with the weakening economy. This reason makes sense because almost every possible good has diminished in sales. Since the economy has pretty much gone down the toilet, everyone has become more careful with their money. Within being careful with their money, they are forced to make sacrifices such drinking water instead of beer or perhaps spending a girlfriend’s birthday at the movies instead of buying some jewelry. In my experience, my parents have been forced to shop at places like Costco where they can buy a lot for very little. I myself have gone to great lengths to reduce my costs whether it be not going out to eat and eating at the dorm hall to wearing the same shoes for the past three years.
Nevertheless, there’s still the reason of why movies have still profited from this abysmal time? Silver says that “movies are not typically seen as extravagant. You don’t feel guilty after purchasing a movie ticket, you feel kind of wholesome”. The fact that drinking beer or gambling may be a sin to some, those same people consider movies to be sort of family event. At the end of the article, Silver suggests that this incident could be classified as weberian. That term refers to a book written by economist and sociologist Max Weber who wrote many essays saying that capitalism was developed by Protestants who got many people to work in their companies and create enterprises and take part in trade to gain wealth.
Even in other places like the United Kingdom, people have noticed significant decreases in beer sales. Although they too are being affected by the economic problems in the United States, they also have a big beer tax of nine percent that was added last year. Thanks to this new tax, beer sales in pubs went down over eight percent and also went down six percent in the supermarkets during the third quarter. According to the British Beer and Pub Association (BBPA) president Rob Hayward there have been averaging about five pubs shutting down each day. Another reason for this problem in the U.K. is the market for alcoholic beverages. They have more kinds of beer, wines and even cider being sold in pubs and clubs. Unlike the U.S., however, the U.K. has had a drop of beer sales since 2005 and even a pretty good variation of sales since 1997.
As the economy gets worse, it seems that this problem may continue to escalade unless Obama can think of a good plan to go with. But for now, the world can use a bit of soberness right now.

Comments

I find that the fact that Americans are spending less on beer makes sense. People are losing their jobs, making less money, therefore have less to celebrate and less money to spend. But with everything that is going on in our plummeting economy today, depression is on the rise. Usually depression and alcoholism go hand in hand with each other. People drink to make themselves feel better and forget about all the bad things that are going on. On the other end people go out to see a movie to get the same effect. They want to escape in to a different world other than their own. That is why we have seen movie sales increase these past few months. It just doesn’t make sense to me how on the other end alcohol sales have plummeted. Maybe the values of Americans have changed, and they are going for the more wholesome approach to dealing with this recession.

I found after doing a little research on this article and the sources that I it was written with that the chart posted along with the article is talking about alcohol that has been purchased for home consumption. So maybe this article is possible slightly misleading. So all that article is talking about is what people are drinking in their home, they could be drinking just as much or maybe even more outside of the home. Also the fivethirtyeight.com (the source that the Consumerist used) is referring to total alcohol, where the Consumerist talks strictly about beer sales.

The question you ask is this: “why does anyone care?” and I think a better question is “how could anyone not?” While the article is aimed predominantly at alcohol sales, other sales (jewelry, casino receipts) are also down. At first you might think “oh, people just are not drinking and gambling as much” which, at first glance, is a good thing. When you realize it is primarily in response to the plummeting economy, though, you start to see how bad it is.

I would like to first point out that most macrobrews, such as Coors and Michelob, are less expensive than the microbrews, like you had said. I agree that alcohol, jewelry and gambling may be considered “luxury” items, but they are not always expensive. You also say that “people can go to new movies that cost as much as two dollars,” however, most movie theatres charge between six and ten dollars per movie ticket now a days, so I would consider that to be a luxury as well. “Movies are [just] not seen as extravagant” to consumers because rather than spending six dollars on a beer, which can be gone in twenty minutes, movie goers can escape from reality for a good two hours in a theatre. Silver also states that movies are a “recession-proof industry” so regardless of the economy, they are going to do well. So, even though movie sales are up, that does not mean that they are cheap; maybe the industry is just coming out with appealing movies.

Overall, I think the lack of beer sales, casino receipts and jewelry consumption, regardless of the increase in movie sales, is a big deal. Our economy is in such a horrible state that we cannot even afford to buy a six pack to drink with a friend while watching the game on the weekend. I am not trying to say that America should be drinking or gambling but when we cannot afford to do activities which are usually not even given a second thought about, you know you are in a serious economic crisis and should care very much, especially about what can happen in the future. Who knows, maybe next year we will not even be able to afford regular food.

I agree with your comment, as well as the previous blogger’s comments regarding the declining state of the economy. Rather than repeating what has already been emphasized, I would like to focus on the point you made about movie sales going up. While it is true that is more cost efficient in terms of entertainment value per person (especially considering the fact you can entertain your whole family) than consuming alcohol (people tend not to limit themselves with alcoholic purchases at bars so the money can be piled up), I do not agree that the reason movie ticket sales have risen is because it is “wholesome” and that consuming alcohol is “a sin to some.” I believe that the main driving force that pushes us to the theatres is the sense of seeing something that is unrealistic and will shift our attention to the imaginative world instead of what is reality. This is why we saw a boom in action movies, which are often portrayed in an unrealistic way. In fact, exactly half of the top ten grossing movies in 2008 were of the action genre. Also, you mentioned that it is possible to see new movies for two dollars. While this may be true in some areas, I believe the majority of movie tickets go for at least $6-$7. This is especially true during peak times on weekend nights. Basically, movie sales have increased because of the imaginative nature we receive after watching a movie, not necessarily because they are less extravagant or that beer consumption is seen as a sin to certain people.

Sources

http://www.imdb.com/Sections/Years/2008/top-grossing