Farewell for now to a golden age of drinking

The Economist – 
Schumpeter

The pandemic has hurt the booze business

A YEAR AGO your columnist joined a sailing trip to Islay, an island in western Scotland famous for peaty malt whisky that can singe the hair off your nostrils. The mooring was in front of a distillery called Ardbeg, its name painted in huge black letters on a whitewashed wall facing the sea. Its breakfast included haggis—and a dram of scotch. Then came the distillery tour, and more samplings. Even at midnight, the air reeked with the smoky vapours coming from the mash tun. Night workers cooed over the spirit as it flowed through pipes and jars. They said demand was so strong that production was running round the clock.

Thanks to such artisan devotion, in recent years the $1.5trn booze business has become a gilded one. For the well-heeled (or deck-shoe clad), brands like Ardbeg, owned by LVMH, a French luxury-goods firm, could sell rare whiskies at more than $100 a bottle. Champagne had record turnover last year, and among still wines even rosé, long frowned upon by connoisseurs, developed a cachet. Financially, the biggest drinks companies performed a feat of mixology that would make a bartender blush. As overall volumes declined in the West, firms like Diageo and Pernod-Ricard coaxed people into spending more on higher-quality brands, sharply increasing profits. Brewers, led by Anheuser-Busch InBev (ABI) and Heineken, acquired competitors and slashed costs, creating a high-margin duopoly in some emerging markets. […]

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This article appeared in the Business section of the print edition under the headline “Closing time”