Recession slows 2009 US liquor sales -trade group

* US spirits volume up 1.4 pct in ’09; revenue flat-DISCUS

* CEO says hopeful on 2010 but declines to give forecast

By Martinne Geller

NEW YORK, Feb 2 (BestGrowthStock) – Americans slightly slowed their
consumption of hard liquor last year, a trade group said on
Tuesday, proving that spirits are relatively resilient in a
recession, but not immune.

U.S. revenue for spirits makers in 2009 was flat even
though sales volume rose slightly, as many budget-conscious
consumers turned to lower-priced drinks, according to the
Distilled Spirits Council of the United States (DISCUS).

The trade group expects sales growth to rebound as the
economy mends, but stopped short of giving a forecast for
2010.

“In our view, we can begin to see the light at the end of
the tunnel here in the recession, but your guess is as good as
ours how long is the length of that tunnel,” said DISCUS CEO
Peter Cressy.

“We’re cautiously, cautiously hopeful that things will get
a little better,” he added. “If the economy continues to move
forward and if we begin to see, in this first quarter, some
return to job growth, I think things will get better.”

U.S. sales by volume rose 1.4 percent in 2009 to 187
million 9-liter cases, and revenue was flat at $18.7 billion.
That represents a slowing from 2008, when volume rose 1.6
percent and revenue rose 2.8 percent.

Volume of cheapest spirits rose 5.5 percent, while those at
the highest price points, saw their volume fall 5.1 percent.

“There definitely was some trading down,” Cressy said. But
he was encouraged that spirits’ share of the alcoholic drink
market by volume rose half a percentage point in 2009, a sign
that some consumers might have migrated away from beer or wine,
and could trade up to premium spirits once budgets allow.

Exports of U.S. spirits fell about 4 or 5 percent from
2008, but remained above $1 billion for the third straight
year, said DISCUS Chief Economist David Ozgo. The largest
export markets were Canada, Britain and Australia.

Last week, Fortune Brands Inc (FO.N: ), maker of Jim Beam and
Maker’s Mark bourbons and Sauza tequila, said sales in its
spirits business rose 3.5 percent in the fourth quarter, as the
weaker U.S. dollar boosted the value of international sales.

Other large players in the spirits industry include:
Diageo PLC (DGE.L: ), Pernod Ricard SA (PERP.PA: ) and privately
owned Bacardi Ltd.

By category, the strongest performers in the United States
in 2009 were tequila with a 5.2 percent rise in volume, vodka
with a 4.9 percent rise and the brandy and cognac category with
a 3.3 percent increase.

The hardest-hit category was cordials, where volume fell
4.3 percent, DISCUS said.

Ozgo said the industry’s recent performance was consistent
with that of prior recessions.

“The industry has always recovered in past recessions and
the high-end share has always continued to grow,” Ozgo said. “I
see no reason why the pattern would be broken.”

Money

(Reporting by Martinne Geller, editing by Leslie Gevirtz)

Recession slows 2009 US liquor sales -trade group