Image: Beer
Kirsty Wigglesworth  /  AP
A pint for your economic pain? Fewer are actually being served as economy worsens.
updated 10/27/2008 7:13:04 PM ET 2008-10-27T23:13:04

Britons may be reeling from the international financial crisis, but few are crying into their beer.

Beer sales are falling as the economy worsens, defying predictions in some quarters that consumers would buy their brew at supermarkets to escape higher prices at pubs.

The British Beer and Pub Association reported Monday that total beer sales fell about 7 percent in the third quarter — the equivalent of 161 million fewer pints compared with the same period in 2007.

Sales of the iconic British pint in pubs have been in decline for years, leading to the closure of thousands of hostelries around the country.

Now the association's Quarterly Beer Barometer reveals that the downturn has broadened to supermarket sales.

"The accelerating decline in beer sales is a clear sign of a worsening economy, worried households and weakening spending," said Rob Hayward, the association's chief executive.

Supermarket and liquor store sales fell 6 percent between July and September compared with the same period last year, slightly behind the 8.1 percent drop recorded for pubs, bars and restaurants.

From the sidewalk cafes of Paris to the beer cellars of Berlin, there are signs Europeans are drinking less.

Sales of French champagne dipped 2.6 percent in the first eight months of the year, according to figures from champagne winegrowers' committee CIVC.

Gerard Laloi, who heads a group that represents France's bar owners, said beer sales have been falling since January, with bar beer sales down 12 percent in the first nine months of 2008, compared with the same period a year earlier.

Laloi blamed the decline on a smoking ban that took effect in bars and restaurants on Jan. 1, as well as on the economic downturn.

Germany's brewers sold just under 11 billion pints of beer in the first six months of this year — before the crisis took hold, but amid growing economic concern in the wake of the U.S. subprime meltdown. That was a decline of 1.7 percent from the first half of 2007.

The flagging economy is not the only factor in the decline. The German statistics agency said other causes were this summer's poor weather, new smoking restrictions and price increases driven by rising energy costs and higher costs for hops and malt.

As in other countries, beer consumption in Germany has been falling steadily for more than a decade, a trend that experts have attributed to an increasingly health-conscious public.

In the U.S., beer sales are slowing, but still growing, said Benj Steinman, publisher of trade publication Beer Marketer's Insights. Sales to retailers this year are up about half a percent, he said. That's down from the 1.4 percent growth rate the beer industry saw last year and 2.1 percent in 2006. But Steinman notes that the industry's long-term growth rate is about 1 percent a year.

"The beer industry overall is performing surprisingly well given what's going on," Steinman said. "It's just resilient. It's not recession-proof but it resisted more than many other industries, seemingly."

Sales of imported beer, though, are down 3 percent, Steinman said, a sign people are curbing their purchases of pricier brews. Micro-brewed beers, which command higher prices, though often not as much as imports, are up slightly this year.

The British Beer and Pub Association, whose members brew 98 percent of Britain's beer and include nearly two-thirds of the country's pubs, said the problem was exacerbated by increases in the alcohol tax, which brings in about $180 million a year. The government increased beer duty by 9.1 percent in March.

"This sales trend is symptomatic of the problems infecting the broader economy," said Hayward. But, he said, government policies "are making a bad situation worse."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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