Ohio liquor sales up as economy staggers

1/16/2009

COLUMBUS Despite the state s bad economy or maybe because of it Ohioans bought a record amount of liquor last year and brought a rare smile to the faces of those who craft the state budget.

Ohioans, who are increasingly seeking out more expensive premium brands, filled their liquor cabinets with vodka, whiskey, and rum to the tune of $719.2 million, a jump of nearly 5 percent over 2007. Ohio saw a record profit margin of 30.1 percent for its state-run system, resulting in a net profit for the state of $213 million.

At least part of the profit was because of increased prices, but the state also saw a 2.64 percent increase in total gallons sold. In all, Ohioans purchased 10.5 million gallons of spirits, products containing more than 21 percent alcohol.

Ohio has seen a steady increase in liquor sales for several years, mostly due to increases in product prices, a continuation of the trend of consumers buying more premium-priced products, and a rise in the level of consumption, Commerce Department Director Kimberly Zurz said.

She also attributed the greater sales figures to better inventory management, product selection, and management of contract liquor agency locations.

Ohio maintains a monopoly over the selling of liquor in the state, selling the product wholesale to more than 440 contract liquor agents and retail through its own stores.

Ohio governors and lawmakers have often increasingly turned to revenue from liquor sales to help solve their budget problems. As revenue has come in above projections, the state has routinely transferred the money to help patch holes.

Last year Gov. Ted Strickland and Republican legislative leaders helped to balance a $1.57 billion economic stimulus package by earmarking increased revenue from liquor sales to pay off bonds.

Seven of the top 10 sellers are premium-priced products, and that s something that s been continuing for some time, Commerce spokesman Matt Mullins said.

The No. 1 seller, however, Kamchatka Vodka, is a cheaper brand made in Kentucky.

Growing in popularity and the only product in the top 10 not easily categorized as whiskey, vodka, or rum is Jagermeister, a German herbal liqueur.

Although overall sales are up, there are signs that the state s economy is causing a shift in consumer buying.

While retail sales were up 7.29 percent this year, wholesale was down half a percentage point, an indication that consumers are buying their liquor by the bottle and taking it home.

The state generally sells wholesale to its retail agents who turn around and sell it by the bottle and to bars and restaurants who sell drinks by the glass.

The economy is not doing very well, so people aren t going out to bars and restaurants, Mr. Mullins said.

The spike in gas prices contributed, and the statewide smoking ban may be having an effect on people going out to bars and restaurants.

Counting about $71.4 million in state sales and liquor taxes collected, the Department of Commerce s Division of Liquor Control has turned over a total of $298 million to the state.

Contact Jim Provance at:jprovance@theblade.comor 614-221-0496.