Feeling the pressure of the economic downturn, South Africans are tightening their budgets and cutting out unnecessary expenses. However, alcohol which is a luxury item is still very high on the priority list for most people.

The Nielson Global Consumer Confidence Index saw South Africans’ consumer confidence dropping to its lowest level yet , with 15% of people saying that they have no spare cash at the end of the month – and the 41% that do say they use it to pay off their debts and credit cards.

With these stats, surely South Africans should be cutting luxuries like alcohol straight off the shopping list?

This doesn’t seem to be the case:

Pick ‘n Pay’s food merchandise director Paul Connellan was quoted saying: ” When consumers have less discretionary income per month, goods such as alcohol and tobacco are recession-resistant and perform well.”

Proving this further SAB managing director, Tony van Kralingen says, “The beer market has historically been resilient in tough economic times and it is likely to perform similarly in the current economic climate,”

He goes on to say, “We see sustainable opportunities in the premium market, even though the sector’s growth rate has softened more recently.” SABMiller recently introduced two new beers to the SA market, Grolsch and Dreher Premium Lager. SAB recorded a 6% growth rate in line with last year.

Is this a uniquely South African phenomenon? America, who has undoubtedly been hit very hard by the recession, is reporting the same thing. As Americans face tougher times from a slowing economy, they are consuming more alcohol, Reuters reported Jan. 12. Clearly, people need to hang on to remnants of their ‘normal’ lives in times of crisis.

The questions are clear, is alcohol an untouchable commodity? Do we need to prioritise our expenditure? In tough times people need to find relief and it seems that people will always find a way to fund what they enjoy doing, whether it means changing from their favourite to a cheaper brand or cutting down on their consumption.

Source: bondbusters.co.za bondbusters.co.za <a/>