Despite hard times, alcohol sales are on the upswing

Sales at Pennsylvania's state-operated Wine & Spirits stores reached a record $1.77 billion in fiscal year 2007-08, generating more than $428 million in sales and liquor taxes and profits for the commonwealth.

"As of Feb. 1, we are up 4.2 percent from the same period a year ago," Pennsylvania Liquor Control Board spokesman Nick Hays said. "Last year, our sales were a record. If we continue the trend, it will be another record this year."

However, the pace of growth has been slower.

By the end of June 2008, growth was 4.7 percent compared with 7 percent at the end of June 2007.

"Our sales are still up, and we are grateful for that," Hays said.

Results across the country are similar.

Nationally, in 2008, revenue reported by liquor suppliers rose 2.8 percent from the previous year to $18.7 billion, according to the Distilled Spirits Council of the United States.

However, the rate of growth also has declined.

''Sales increased nationally by 3 percent in 2006, dropped to 2.4 percent in 2007 and to 1.6 percent in 2008,'' said David Ozgo, chief economist. "Liquor is recession- resilient, not recession proof. Sales through restaurants and taverns make up about 25 to 30 percent of our sales. We are heavily impacted by the recession.''

Meanwhile, beer sales appear to be holding their own.

David Shipula, president of the Malt Beverage Distributors Association and owner of Beer Super in Wilkes-Barre, doesn't believe the state has been affected as much as other areas of the country.

He said January and February sales are normal for this time of the year, which is typically a slow period.

''I feel lucky I have not had a nose dive like everything else," Shipula said.

Sales are up at Roxy Beverage in Altoona, which has changed from wholesale to retail sales during the last 2 years, said Steve Rawlings, president.

His retail sales are up 30 percent from the same time last year.

"One thing I am seeing is people are switching from premium to popular-priced brands," he said.

Although sales are up, that doesn't necessarily mean more people drink during a recession.

''People don't drink more during a recession - that is just a myth,'' Ozgo said. ''Alcohol is like any other commodity; when difficult times hit, people stop drinking as much.''

No matter how much people drink, the state liquor tax of 18 percent, which is in addition to the PLCB price and included in the shelf price of each item, continues to play an important role in Pennsylvania.

For the fiscal year that ended June 30, the agency collected $251 million in liquor taxes and $97.8 million in sales taxes and transferred $80 million in profits to the state treasury.

''All tax revenue, the liquor tax and the sales tax goes to the general fund and helps pay for things like education programs, health programs, public safety, roads and bridges,'' Hays said.

Only two counties - Philadelphia and Allegheny - charge an additional local tax. They are allowed to charge an additional 1 percent sales tax on any products under state law, Hays said.

Sunday sales, which began in 2003, also have been beneficial to the PLCB.

The Wine & Spirits store in the Pleasant Valley Shopping Center is among those that are open Sundays.

''We looked at places where the demand was the greatest,'' Hays said. ''Up to 25 percent of the stores in our system have Sunday sales.''

The Liquor Control Board has a network of 620 stores across the state. Changes are coming to them, as improvements to the look are planned along with a renewed commitment to customer service.

''We are committed to providing a world-class shopping experience for our consumers, with the top-notch service they expect and deserve," said LCB Chairman Patrick ''P.J.'' Stapleton in a press release.

Mirror Staff Writer Walt Frank is at 946-7467.