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SA’s gloom puts breaks even on booze spending

Investing in booze producers was always a sure-fire way to make a decent return. People drink when they’re happy, and they drink more when they’re sad. But South Africa’s business cycle has been so negative for so long, even booze producers are struggling.

Distell, the country’s biggest drinks distributor, warned recently that it was seeing declines in sales volumes, amidst subdued demand for its products, which include Klipdrift, Amarula, Savanna and Bain’s.

AB InBev, which makes everything from Budweiser to Castle, is feeling the brunt of a long running decline in beer demand globally, andSouth Africans are also cutting back on their favourite tipple.

Whisky imports are also declining. Whisky imports fell 11% in value year on year between 2017 to 2018. That’s significant for a heavily-marketed category that includes top-end brands drunk by people with large disposable incomes, and is yet another indicator of a slowing domestic economy.

See also: SA imports 42 million bottles of Scotch a year – and those producers refuse to allow ‘whisky-flavoured’ cane here

And Norman Goodfellows‘ usually bold annual Christmas drinks catalogue is a shadow of its former self, when it reached legendary proportions.

The liquor merchant still advertises a range of 50-year-old whiskies priced north of half a million rand a bottle, but its layout, size and tone is more modest than in previous years.

“The booze industry is not immune and is a very good indicator of liquidity. We have definitely seen a move to ‘lower and less’. There are still a couple of big hitters with decent spend but on balance the belts are tighter,” says Norman Goodfellows director Carrie Adams.

Source: BusinessInsider SA

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