Corby Distilleries Ltd. owes the Ontario liquor store workers' union a beer. Or more appropriately, a shot of vodka.
The liquor company behind vodka labels such as Absolut and Polar Ice reports a 24-per-cent increase in profit thanks in part to a phenomenal run on Ontario liquor stores in June. Thousands lined up at Liquor Control Board of Ontario outlets when it looked like they might close because of a strike. The frenzy to stock up on booze helped the LCBO ring up its biggest day ever, with $56-million in sales.
LCBO spokesman Chris Layton said staples such as vodka, rum and whisky were flying off shelves at a faster rate, helping companies such as Corby, which also markets whisky brands including Jameson and Wiser's. "People were focusing on spirits because they would still be able to purchase beer at The Beer Store and Ontario wines at winery stores," Mr. Layton said. (Employees at The Beer Store and chains such as Wine Rack were unaffected by the potential LCBO strike, which was averted on June 24 in a last-minute deal.)
The one-time spike in sales mirrors a wider trend, with more Ontarians opting for the hard stuff. LCBO's spirits sales had the biggest growth of any category between April and June, up 4.3 per cent over last year. Overall liquor sales haven't flagged as consumers tighten their belts, with the LCBO's second-biggest sales day also occurring within the past year, on Christmas Eve, 2008.
"The spirits industry isn't immune from recession by any means but the business has fared much better than any other consumer goods industry," said Patrick O'Driscoll, president and chief executive officer of Corby. "Sometimes growth of spirits in boom times isn't as dynamic, but the downturn can be cushioned."
Corby said the boost in Ontario helped offset losses in Alberta, where the province's largest private retailer reports same-store sales declined 4.8 per cent in the first half of the year. In Quebec, the provincial liquor board reported profits rose 12.8 per cent over last year in the quarter ended June 20.
In Ontario, beer and wine sales were up slightly while the coolers category declined 6.6 per cent. Corby reported that retail volumes of its Seagram Coolers were down 20 per cent for the year ended June, 2009, but products such as Polar Ice Vodka and Wiser's Canadian Whisky were up slightly over last year. "With the cooler summers, people are probably buying spirits more than they would have normally," Mr. Layton said. "They tend to have a mixed drink rather than going to a beer or cooler."
The so-so summer weather has also been a headache for one of the country's biggest brewers, but Labatt Brewing Co. Ltd. reports sales have remained steady. "We're having more problems with the weather than the recession," said Richard Musson, Labatt's vice-president of marketing. "We're pretty good at surviving when the economy isn't doing well."
Mr. Musson said sales of Labatt's pricier imports, such as Stella Artois, had been growing in recent years, but stagnated and started declining late last year. However, consumers have yet to switch en masse to discount brands, as American beer drinkers did after the recession hit.
Corby said sales declines in its McGuinness liqueurs - used to flavour everything from a cosmopolitan to an appletini - could be linked to the economic downturn, because people don't go out for drinks as often.
"In this recessionary time, there obviously is a tendency to go out one day less a week, and categories like liqueurs are more susceptible than stable categories, like whisky and rum," Mr. O'Driscoll said. "In times that are a bit tough, those are the things that go first."
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