Consumers cutting back, but not on liquor

In a persistent economic downturn, though, drinking habits can change significantly over time.

“A lot of people think that when times are bad people will drink more. The evidence is pretty clear that, at least in terms of alcohol sales, that that’s not true, that people will drink less,” said Christopher Ruhm, a professor of economics at the University of North Carolina at Greensboro.

Gruenewald agrees, but makes an interesting observation. When the economy tanks, the wealthy can afford to keep drinking. Poorer consumers — often stereotyped as the ones with drinking problems — are the first to cut back, he says.

But just because overall consumption may dip, doesn’t mean everyone behaves that way, says Thomas S. Dee, a professor of economics at Swarthmore College.

“Someone might cut back on the expensive bottle of wine but spend that same amount of money on quite a bit of high alcohol whiskey or liquor and they could engage in much more serious binge drinking,” says Dee. His analysis of data, culled from surveys taken between 1985 and the late 1990s, found that a 5 percentage point increase in the unemployment rate is linked to a 8 percent increase in binge drinking.

That conclusion is based on what is now old data. At the White Horse — one of two bars in Manhattan with that name — folks are living in the here and now and there’s little agreement on just what this economy means to the drinking crowd.

In a booth across from the bar, Tibor Nemes and Paul Davis, executives at a Wall Street firm, said having a few drinks is a fixture of social life that they can’t imagine giving up. But Tom Quirke, the dayside bartender says some folks are doing just that.

“It’s not great, let me tell you,” Quirke says. “All the Scotches are sitting still. The Budweiser on tap is a good mover. That’s about it.”

But the reality, for many folks, is the middle ground. Take Trish Penn, a real estate agent from Anne Arundel County, Md., who met up with a pair of New York friends at the bar.

The downturn in home sales has cut deeply in to her income, Penn says. That hasn’t curtailed her drinking, but it has made her much more careful. Now she’ll stop for beer and take it home. And when she goes out, she pays much closer attention to prices.

“I went some place last night...and I said, ’Are you kidding me! $8 for a beer!” Penn says. “I only had one pint.”

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